The past couple of months we’ve talked quite a bit about the Cash For Clunkers program, how it worked, and who could expect to receive a voucher towards the purchase of a new car. People were split down the middle as to whether the voucher program was even a good idea, with some saying it was just another example of wasteful government spending – while others said it was a great way to stimulate spending and boost our economy.

We may now have another cash for clunkers type program to debate.  Earlier this year as a part of the American Recovery and Reinvestment Act a new program was announced that would allow people to receive rebates that would be good towards the purchase of a new ENERGY STAR® rated appliance to replace their less efficient models.

U.S. Department of Energy Secretary Steven Chu today announced the availability of nearly $300 million in funding from the American Recovery and Reinvestment Act for state-run rebate programs for consumer purchases of new ENERGY STAR® qualified home appliances.  The new program underscores the Obama Administration’s commitment to make American homes more energy efficient, while helping to support the nation’s economic recovery.

“Appliances consume a huge amount of our electricity, so there’s enormous potential to both save energy and save families money every month,” said Secretary Chu.  “These rebates will help families make the transition to more efficient appliances, making purchases that will directly stimulate the economy and create jobs.”

The new funding will be awarded to states and territories, through their energy offices, using a formula set forth in the Energy Policy Act of 2005.  Each state or territory is required to submit a plan that specifies which ENERGY STAR® appliance categories will be included in their rebate program, the rebate level for each product type, how the rebates will be processed, and their plan for recycling old appliances.  States and territories must first file an initial application expressing their intent to participate by August 15, 2009, followed by a full application by October 15, 2009. Approximately 10-25 percent of each award will be spent on administrative costs.

The goals of the program were to spur economic growth, create jobs, save energy and reduce greenhouse gas emissions.  How successful it will be in those goals is anyone’s guess.

Depending on which state you’re in, there is a different amount of money available to use towards rebates, so it is probably best to move on it as fast as you can once the program starts.  To find out how much money your state has to use towards appliance rebates, check this document.

How Do I Take Part In The Cash For Appliances Program?

The program will start some time late fall 2009, and program details will vary state by state.  The states will have the ability to say which appliances are eligible, along with how much of a rebate consumers would get. The energy department has set a deadline of October 15th for states to file formal applications for the program.  Details should become clearer for your state at that time.

Although the details will vary state to state, basically the program will authorize rebates to consumers of $50-$200 for purchases of more efficient household appliances. Unlike with the Cash For Clunkers program, people who take part in the program won’t have to trade in their old appliances. (thank goodness for that!)  It is also expected that the rebates will be stackable along with other rebates currently available.  So if your municipal district offers a $100 rebate towards a refrigerator, you would get that in addition to the federal rebate.

The Energy Dept. expects the bulk of the $300 million to be awarded by the end of November.

What Appliances Are Eligible For The Rebate?

To qualify for the rebate the new appliance must be ENERGY STAR® rated.  Qualified appliance categories eligible for rebates may include (depending upon your state):

• central air conditioners
• heat pumps (air source and geothermal)
• boilers
• furnaces (oil and gas)
• room air conditioners
• clothes washers
• dishwashers
• freezers
• refrigerators
• water heaters

Let The Marketing Push For “Cash For Refrigerators” Begin!

Major appliance manufacturers have been feeling the pinch the past couple of years, with sales dropping and plants being shut down.

The leading appliance makers have felt the pinch. Whirlpool of Benton Harbor, Mich., which controls about 40% of the U.S. market, has seen its sales drop 20% through the first two quarters of this year. North American shipments for its Stockholm-based rival Electrolux, meanwhile, have dropped for a dozen consecutive quarters. Both companies have laid off hundreds of workers, and General Electric (GE) mulled shutting down an entire refrigerator plant earlier this year until deciding to keep it open with a reduced workforce.

Once the program begins I’m sure we can expect to see a huge marketing push, just as we saw with the Cash For Clunkers program.  Anything the appliance manufacturers can do to help spur sales will be helpful for them.  On the other hand, many are doubtful that the program will have much effect because the value proposition in receiving a smaller rebate for an appliance as opposed to a $4500 voucher for an old car just isn’t as motivational.  Many people will probably be able to get by with their old appliance for a while longer.  The manufacturers are hoping that’s not the case.

What do you think about the Cash For Appliances rebate program?  Does it make you more likely to buy a new fridge, dishwasher or water heater? Tell us what you think in the comments!

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Cash For Appliances Government Stimulus Rebate Program Will Give Money For Old Refrigerators, Washers And More

We’ve been talking a lot recently about the Cash For Clunkers program, and how the program has been successful by some standards, and troubled in other ways.  The program ran out of money one week after it launched, and was only re-launched after congress passed another 2 billion dollars for the program.

Now the program is beginning to run out of money again.  The Obama administration has announced that the Cash For Clunkers program will end on Monday:

The popular Cash for Clunkers program will end on Monday at 8 p.m. Eastern time, the Obama Administration said Thursday.

As of Thursday, the Administration said the Clunkers program, officially the Car Allowance Rebate System, had recorded more than 457,000 dealer transactions worth $1.9 billion in rebates.

“Applications for rebates will not be accepted after 8 p.m. EDT Monday and dealers should not make further sales without receiving all the necessary paperwork from their customers,” the Administration said in a statement.

The Administration expressed confidence that money would be available to pay all eligible rebates. A total of $3 billion has been allocated to the program.

The Department of Transportation “has been very focused on making conservative assumptions about this program, and it’s precisely why they’ve announced the winddown at this moment,” a senior Administration official said.

The Administration has countered recent complaints of payment delays by saying that many of the applications to the program from dealers have been incomplete and needed additional review or had to be sent back.

Want to take advantage of the program before it runs out?  Don’t forget to read our posts detailing the program, and get to your participating dealer before 8pm eastern on Monday!

• Cash For Clunkers Eligibility
• Common Questions About The Cash For Clunkers Program Answered; FAQ

Also, if you’re signing a deal this weekend, be careful of what you’re signing as some dealers are adding clauses to the contract stipulating that you will have to pay them back for your clunker rebate if the voucher is denied by the government.

Dealers Opting Out Of Cash For Clunkers

In the last week or so a large number of dealers have been opting out of the Clunkers program as they have been having major problems even getting paid for the Clunker deals that they have signed and sent to the government for approval.   In a cash important business like the car business, this could be a huge problem for a lot of dealers.

Some dealers..  already have stopped participating in the $3 billion Cash for Clunkers program. On Wednesday, Transportation Secretary Ray LaHood sought to assure dealers that they will be reimbursed for money they have essentially fronted to customers buying cars.

“They’re going to get their money,” he said.

The Greater New York Automobile Dealers Association, which represents dealerships in the New York metro area, said Wednesday that about half of its 425 members had left the program because they could not afford to offer more rebates. They also are worried about getting repaid.

In the Kansas City area, program delays prompted Randy Reed’s Buick-Pontiac-GMC and Nissan dealerships to stop participating in Cash for Clunkers on Monday. Including a dealership in St. Joseph, Reed said his stores had not been reimbursed yet for about 40 deals.

“It seems like a program the government has mismanaged from the start,” he said. “Our number one goal is not do anything to put ourselves at risk with our customers. None of us can afford the kind of losses we’re looking at if we continue participating and don’t get reimbursed.”

I for one am not sad to see the Cash For Clunkers program go.  The program, while popular (anytime you “give something away” it’s probably going to be popular), has been beset with problems.  The aim of trying to have a positive environmental impact is dubious at best with even environmental groups saying they aren’t impressed. The economic impact isn’t really agreed on either with some experts like Alan Greenspan saying that he didn’t think that the program stimulated the economy. Add to that the fact that the program has probably moved many people into a worse debt situation than they were in previously, and I am actually happy that the program is over!

What do you think?  Are you going to be taking advantage of the program in it’s last weekend?  Are you glad to see the program go?  Do you think all of these dealers with pending deals will get paid, or will the government stiff them? Let us know what you think in the comments!

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Cash For Clunkers Program Is Dead Again. Gas Guzzler Trade-In Program Ends Monday.

More Cash – For Cash For Clunkers

It was only a week ago that we were talking about how the Cash For Clunkers program had only been active for a week, and it was already running out of money.  $1 billion dollars had been assigned to the program and after demand for the vouchers was much larger than anticipated, the program had to suspended.   The government didn’t want people trying to get a voucher that was no longer available.

Now, a week after the program was suspended, Congress has decided,  that the program was such a rousing success, that they should give it another $2 billion dollars.   Last night they approved an extension of the program:

The U.S. Senate approved and sent to the White House on Thursday a $2 billion extension of the “cash for clunkers” autos sales incentive program.

The measure, approved by 60 to 37, extends the successful program that has raised sales of the U.S. auto industry.  President Barack Obama was expected to sign it quickly.

The initial $1 billion of funding approved in June for “clunker” business has generated more than $920 million in rebates and more than 220,000 in auto sales.

Supported by the incentive program, U.S. auto sales overall were down about 12 percent in July from a year earlier, but it was their best performance this year.

A poll was done last week asking a sampling of Americans if they thought the program should get more money.  54% of the respondents said that it shouldn’t.  Despite a majority of people being against the added expenditure, the program will now be continued.

The swift “success” of the program was stunning to a lot of people, and to some degree the government wasn’t ready for the deluge of voucher submissions that happened in the first week.

The administration, stunned by the swift success of the initiative and stung by a series of administrative glitches in trying to process rebates, had warned that the “clunker” measure would be suspended if more money was not approved by week’s end.

The House of Representatives passed the $2 billion extension on July 31. The Senate took a week to affirm that action.

Some senators did introduce amendments to the bill in order to try and kill the measure, but those were soundly defeated – and the program was approved for more money.   So if you had planned on trading in your clunker, you may still have time – but act quick!  Who knows when it will run out this time.  For more details about the program, who is eligible, and what you need to do, check out these articles on our site:

• Cash For Clunkers Eligibility
• Common Questions About The Cash For Clunkers Program Answered; FAQ
  

Not Everyone Is Happy With The Program

Some critics argue that while the program was successful in handing out vouchers to thousands of car buyers, that the program isn’t truly as much of a boon to our economy and the environment as is being suggested.

Groups that aren’t as happy with the program as car dealers?  Mechanics,  scrap yard operators and automotive aftermarket parts dealers.

Who doesn’t like the government’s “cash for clunkers” program? Your mechanic, for one.

Owners of automotive repair shops say the program to help invigorate sales of new cars is succeeding at their expense.

Bill Wiygul, whose family owns four repair shops in Virginia, said he has already had five or six customers decide against repairs. A man who sits on the board of Mr. Wiygul’s bank traded in his car rather than repair it. “He’d been a customer at our Reston store since it opened,” Mr. Wiygul said….

How do we get on the special interests, special treatment bandwagon? How much is it going to cost me and to whom shall I send the check?” he said. “Who picks the winners in this game ’cause obviously the game is fixed.”

So the government is subsidizing one industry (in which it now holds a large stake) at the expense of other small business people like mechanics and repair shops.

The automotive aftermarket, a $250 billion industry that employs about 4.6 million people, could be among the biggest losers in the clunkers program, said Kathleen Schmatz, head of the Automotive Aftermarket Industry Association: “It’s everybody from the Fortune 500 parts manufacturer all the way through the supply chain to the independent repair shop.”

The group that lobbies for independent mechanics in Washington agreed.

“This package will hurt mechanical repairs without question. You are taking older vehicles that are still fine to use and removing them,” said Robert Redding Jr., the Automotive Service Association’s Washington representative. “If you’re taking hundreds of thousands of vehicles that you normally service off the road with no consideration, it hurts people.”

Has The Program Helped The Environment Or Stimulated The Economy?

Even if you dismiss those who have been hurt as having sour grapes, you still need to consider whether the program will actually succeed in it’s aims of helping the environment and stimulating the economy.  So, first, did it help the environment?

Cash for clunkers could have the same effect on global warming pollution as shutting down the entire country — every automobile, every factory, every power plant — for an hour per year. That could rise to three hours if the program is extended by Congress and remains as popular as it is now.

Climate experts aren’t impressed.

Compared to overall carbon dioxide emissions in the United States, the pollution savings from cash for clunkers do not noticeably move the fuel gauge. Environmental experts say the program — conceived primarily to stimulate the economy and jump-start the auto industry — is not an effective way to attack climate change.

So it sounds like the program will have a negligible effect on the environment – especially when you  take into account the scrapping of all the working cars that could have otherwise been kept running for years to come.  How about stimulating the economy?  Alan Greenspan says that while he supports the program, he doesn’t think that it helped to stimulate the economy.

The former head of the Federal Reserve gave a thumbs-up to the cash for clunkers program but said Sunday it is popular only because the economy was on its way back up and not because it was stimulative.

Alan Greenspan said that the program has worked to get people to buy cars and move stock, but he wouldn’t necessarily recommend it as an economic fix.

“It’s an interesting issue. I mean, I have qualms about the concept, but there is no doubt that that very extraordinary response is a very important indicator that the state of confidence in the economy is beginning to pick up. If we had been — the clunker program had been put in place six months ago, it would have probably been a dud,” Greenspan said on ABC’s “This Week.”

So the program has been successful in Greenspan’s eyes, but only because the economy was already starting on it’s way to a slow recovery.

Still, the administration and many in congress are hailing the program as a marvelous success, and say that it is one of the main reasons for a rebound that is beginning to happen in our economy.

What do you think about the program? Has it been successful in it’s aims, and was it a good idea?  Or do you side with the critics of the program and think that the program is just another government money drain? (can  you tell which side I come down on?)  Let us know your thoughts in the comments.

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Cash For Clunkers Gets A $2 Billion Cash Infusion And Rises From The Dead.. For Now

The Cash For Clunkers program has only been active since last Friday, but word is now leaking out that the CARS program will be halted at midnight on Thursday July 30th, less than a week after it launched.  The problem?  There are fears that the program may have already run out of money.  The program was to run until November 1st, or until the funds were depleted. It appears the funds have been depleted! From Fox News:

The government plans to suspend its popular “cash for clunkers” program amid concerns it could quickly use up the $1 billion in rebates for new car purchases, congressional officials said Thursday.

The Transportation Department called lawmakers’ offices to alert them to the decision to suspend the program at midnight Thursday. The program offers owners of old cars and trucks $3,500 or $4,500 toward a new, more fuel-efficient vehicle.

The congressional officials spoke on condition of anonymity because they were not authorized to speak publicly. Rae Tyson, a spokesman for the National Highway Traffic Safety Administration, which administers the program, declined comment.

So it seems that the program has been either been much more successful than anticipated, or the government bureaucracy is just too slow to keep up with all of the deals that dealers are sending their way. 

Congress last month approved the Car Allowance Rebate System program, known as CARS, to boost auto sales and remove some inefficient cars and trucks from the roads. The program kicked off last Friday and was heavily publicized by car companies and auto dealers.

Through late Wednesday, 22,782 vehicles had been purchased through the program and nearly $96 million had been spent. But dealers raised concerns about large backlogs in the processing of the deals in the government system, prompting the suspension.

A survey of 2,000 dealers by the National Automobile Dealers Association found about 25,000 deals had not yet approved by NHTSA, or nearly 13 trades per store. It raised concerns that with about 23,000 dealers taking part in the program, auto dealers may already have surpassed the 250,000 vehicle sales funded by the $1 billion program.

“There’s a significant backlog of ‘cash for clunkers’ deals that make us question how much funding is still available in the program,” said Bailey Wood, a spokesman for the dealers association.

So now that the Cash For Clunkers program is suspended, a lot of people who thought they had time to do a deal may not be able to cash in.  The question now is, will congress allocate more money for the program so that more people can take part? Was it successful enough, and did it have the effect that they were hoping?

Even before the suspension, some in Congress were seeking more money for the auto sales stimulus. Rep. Candice Miller, R-Mich., wrote in a letter to House leaders on Wednesday requesting additional funding for the program.

“This is simply the most stimulative $1 billion the federal government has spent during the entire economic downturn,” Miller said Thursday. “The federal government must come up with more money, immediately, to keep this program going.”

Brendan Daly, a spokesman for House Speaker Nancy Pelosi, D-Calif., said they would work with “the congressional sponsors and the administration to quickly review the results of the initiative.”

General Motors Co. spokesman Greg Martin said Thursday the automaker hopes “there’s a will and way to keep the CARS program going a little bit longer.”

Friday morning there is already talk of Congress passing a 2 billion dollar extension to the cash strapped program, and the White House is saying the program will be available at least through the weekend. Read details of that here.

Now that the program may be extended – the question remains. Should it be?  There are already reports of dealers having huge problems getting CARS deals approved, some even being rejected for silly reasons – when the clunker cars have already been destroyed.  That means many dealers will be losing money on those rejected deals because they can’t sell the destroyed cars.  Add to that the fact that the program is a bureaucratic nightmare – with the government not approving deals  in a timely fashion, the government website constantly going down – and the dealers are now extremely worried about cash flow problems.  All of that means you have the making of a huge fiasco.

What do you think? Will the government pass legislation assigning more money to this program?  Will they find that the program has had the stimulating effect that they were hoping?  Is this program just another way for government to waste our money, and will it end up being more trouble than it was worth? Tell us what you think in the comments!

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Cash For Clunkers Program Suspended After Only A Few Days. Here Is Why

photo credit: kevindooley

The Congressional Budget Office released a statement this week stating that they believed the current versions of the 2009 stimulus package would actually be harmful to our nation’s economy in the long run.

President Obama’s economic recovery package will actually hurt the economy more in the long run than if he were to do nothing, the nonpartisan Congressional Budget Office said Wednesday.

CBO, the official scorekeepers for legislation, said the House and Senate bills will help in the short term but result in so much government debt that within a few years they would crowd out private investment, actually leading to a lower Gross Domestic Product over the next 10 years than if the government had done nothing.

CBO estimates that by 2019 the Senate legislation would reduce GDP by 0.1 percent to 0.3 percent on net. [The House bill] would have similar long-run effects, CBO said in a letter to Sen. Judd Gregg, New Hampshire Republican, who was tapped by Mr. Obama on Tuesday to be Commerce Secretary.

The article goes on to talk about how most Republicans and some democrats are balking at the total cost of the bill, which seems to be getting out of hand:

The House last week passed a bill totaling about $820 billion while the Senate is working on a proposal reaching about $900 billion in spending increases and tax cuts.

But Republicans and some moderate Democrats have balked at the size of the bill and at some of the spending items included in it, arguing they won’t produce immediate jobs, which is the stated goal of the bill.

This stimulus package is starting to get out of control, and if it won’t even achieve its stated goal of producing jobs and getting the economy going.  So what’s the point?  The CBO is saying that it will do more harm than good, so why are we even considering this?

Time to scrap the bill, and start over.  Let’s get a much smaller, targeted bill with concrete job creation, tax incentives for businesses to create jobs,  tax breaks for taxpayers, and other things to help boost our economy.   Let’s not subsidize failed business models and companies that didn’t live within their corporate budgets.   Let’s also not turn this into a spend fest for every congressional pet project known to man (which is what it is turning into now).

What are your thoughts on the stimulus package.  Will it pass, and will it end up harming our economy, or helping?

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Congressional Budget Office Says 2009 Stimulus Package Could Be Harmful To Economy

photo credit: Hey Paul

Today Ben Bernanke talked about the stimulus package currently being discussed by President-elect Obama and his incoming administration.  He believes it will help, but that it won’t be enough to bring a lasting recovery.  From the International Herald Tribune:

The chairman of the Federal Reserve, Ben Bernanke, said Tuesday that the fiscal stimulus package currently being discussed by the incoming U.S. administration would help revive the economy but would not be enough to bring a lasting recovery.

“Fiscal actions are unlikely to promote a lasting recovery unless they are accompanied by strong measures to further stabilize and strengthen the financial system,” Bernanke said in a speech at the London School of Economics. “A modern economy cannot grow if its financial system is not operating effectively.”

Bernanke said the Federal Reserve still has “powerful tools” at its disposal to stem the financial crisis even after lowering its benchmark interest rate virtually to zero in December.

The economic outlook has continued to worsen even after the Treasury’s injection of about $250 billion into the banking sector, and Bernanke said that more capital injections and guarantees might become necessary.

He also outlined several options to help financial institutions with their troubled and hard-to-value assets, which continue to be a barrier to improving private investment flows.

Among the options, he mentioned the public purchase of troubled assets, providing asset guarantees and the creation of a so-called bad bank.

Bernanke reiterated the need for “stronger supervisory and regulatory systems,” while being careful not to introduce rules that would “forfeit economic benefits of financial innovation and market discipline.”

Is it just me or do these guys all sound like they’re really not sure what to do to turn things around?  Are they just trying a bit of this, and a bit of that – hoping that something will stick? That’s the feeling I’m getting.

On Monday, In his final news conference before leaving office, President Bush defended the stimulus package as necessary:

President Bush stood by his decision to support the U.S. Treasury Department’s injection of billions of dollars into the economy to unfreeze the financial markets.

Asked by a reporter whether he would ask for the remaining $350 billion in economic stimulus money before President-elect Barack Obama steps in, Bush said he had spoken with Obama and told him he would ask for the money if Obama asks for Bush’s help in making the request before leaving office.

Bush defended the government’s injection of money into the economy, telling the White House press corps that the policies employed were aggressive but needed to correct what he was told would be a financial crunch that would spark fears similar to those experienced during the Great Depression.

The TARP fund is a huge amount of money, but I’m not sure it’s done what they were hoping it would.  There was no real accountability about how it was being spent, and now that they want to release the second 350 billion, some in congress are saying that they won’t permit that unless conditions are met:

Senate Banking Committee Chairman Christopher Dodd is setting out the conditions necessary for Congress to approve releasing the second $350 billion of the roughly $700 billion federal rescue plan.

Dodd said that in order to win authorization of such additional spending, the government will have to do a much better job of accounting to the taxpayers for where money already spent has gone.

The Treasury Department has spent about half of the $700 billion that make up the Troubled Assets Relief Program (TARP) approved last Fall; Congress must approve a release of the remaining $350 billion. In addition, President-elect Barack Obama is asking Congress to ready an ADDITIONAL economic stimulus package, of between $750 and $800 billion, as a combination of infrastructure spending, renewable energy projects, and tax relief for businesses and individuals.

Given the criticisms about how the administration has spent TARP funds, with little to no accountability or proof that the money has fulfilled its intended purpose, lawmakers are evincing qualms about approving a release of the remaining $350 billion – and then adding an additional $800 billion on top of that.

So what will individuals be getting out of this stimulus package?  Tax cuts!:

The package features aid to cash-strapped state governments, $500 to $1,000 tax cuts for most workers and working couples, a huge spending package blending old-fashioned public works projects with aid to the poor and unemployed, and a variety of other initiatives.

Advocates for using tax cuts to promote alternative energy won concessions and the Obama team promised to make a $3,000 job creation tax credit – which has attracted considerable criticism – more workable.

Will the “tax cuts” go to everyone, or just those who pay taxes?  That remains to be seen.

The one thing I do know is that I’m skeptical that the remaining 350 billion in TARP funds and the new 800 billion stimulus package will be spent as we’re told it will be.  Accountability will most likely be put by the wayside again, and the funds will just disappear into the accounts of big banks, local governments and companies – never to be seen again.

What do you think?  Will the stimulus have a  positive effect?  Will everyone get tax cuts?  Will there be more accountability?

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Stimulus Package Was Needed But It Won’t End the Crunch

As the new year gets closer the President-elect and his team are making plans for the new year, and his first term in office.

One of the first things on the table, a stimulus package that could reach or exceed $775 billion dollars.

Regarding the new administration’s stimulus plan, Mr. Axelrod also said that the exact dollar amount Mr. Obama will seek has not yet been determined. “We’ve talked about a package from $675 billion to $775 billion,” he said on CBS’s “Face the Nation.”

“One thing I think everyone agrees on, economists from left to right, is that we have to do something very large,” he said.

I’m interested to see just how large this bill gets, and just how much pork finds its way into this huge (and getting larger) bill.  Just a month or so ago they were saying that the bill would reach 500 billion.  Now they’re saying it could be 675 to 775 billion. I wouldn’t be surprised if the final bill pushes one trillion dollars in size.  And all of that is without any stimulus checks!

Everyone and their uncle is lining up for their piece of the pie right now, looking to close budget gaps, pad their spending for infrastructure, and line the pockets of government special interests across the board.

As you can tell I don’t have a lot of faith in our government and their ability to spend stimulus money wisely.

Also on the Sunday morning shows this week David Axelrod talked about tax cuts.

The president-elect also intends to follow through quickly on his promise for tax relief for most Americans, Mr. Axelrod said, this time on “Meet the Press.” As for repealing the Bush tax cut for the wealthiest Americans, he said that whether it was repealed early or allowed to expire as scheduled at the end of 2010, the tax cut would eventually disappear.

“It’s going to go, it has to go,” he said.

So tax relief for some (which I like), but not for others.  Interesting how tax cuts “have to go” for those creating wealth and jobs.  To me that seems a bit odd.

Not everyone is lining up to rubber stamp the idea of a huge 775 billion stimulus package.

Senate Minority Leader Mitch McConnell (R., Ky.) in a statement Monday supported the idea of using federal spending to boost the economy. But he warned that the price tag, which could approach $800 billion over two years, shouldn’t become an excuse for funding undeserving projects.

“We should have a simple test: Will the yet-unwritten, reportedly trillion-dollar spending bill really create jobs and grow the economy — or will it simply create more government spending, more bureaucrats and deeper deficits?” Mr. McConnell said.

That’s my question.  Will a stimulus package really do anything but make the government more powerful and widespread?  Will it be filled with pork? Will it mean even bigger deficits?

What do you think about the proposed stimulus package?  Is it getting too big?  Is it not big enough?  Would you like to see it include stimulus checks as well?  Let us know your thoughts below.

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Obama 2009 Stimulus Plan Could Exceed $775 Billion Dollars

If you’ve been watching the news lately you’ve probably seen the rash of bad news that we’ve had surrounding large companies and CEOs keeping cooked books, running Ponzi schemes and just defrauding people in all sorts of ways.  It hasn’t been one isolated incident, but multiple incidents.  The one thing they all have in common?  Greed.

Petters Group Worldwide

The first one I read about in recent weeks was big news here in Minnesota when Tom Petters of Petters Group Worldwide (which owns Sun Country Airlines, Polaroid, and some other big names) was arrested by the FBI for running an investment scheme over the years where he allegedly defrauded investors of billions of dollars.  He lured them into funding a company based on tens of millions of dollars in purchases and sales that never occurred.  The scheme was only found out when one executive with knowledge of what was going on turned herself in and offered to testify.

Part of the sadness around this whole situation is that Petters and others were very generous with “their” money,  giving to charities, universities and others.  Now we realize it wasn’t their money to give.  They were greedy, and were giving away other’s money.

Bernard Madoff

In the last few days  another huge scandal has broken surrounding Bernard Madoff, a leading Wall Street investment advisor.  From Yahoo Stock Blogs:

Bernard L. Madoff, a former chairman of the Nasdaq Stock Market and a force in Wall Street trading for nearly 50 years, was arrested by federal agents Thursday, a day after his sons turned him in for running what they said their father called ‘a giant Ponzi scheme.

Over the years Madoff’s investment advisory business had almost always shown good returns, even when others weren’t doing as well.  People thought that he was either getting illegal insider trading information, or was a trading genius.  Most never imagined, however, that he was cooking the books, and creating a giant Ponzi scheme where the losses from old clients investments were paid out as gains from the principal brought in by new investors.

All in all, the scheme ended up costing investors in excess of 50 billion dollars!  That’s an amazing amount of money, dwarfing all previous Ponzi schemes in comparison.

The criminal complaint said that when Mr. Cacioppi and another agent went to Mr. Madoff’s apartment Thursday, Mr. Madoff told them: “There is no innocent explanation.” Mr. Madoff told the agents that “he paid investors with money that wasn’t there,” adding that he was “broke” and had decided “it could not go on.” He said he expected to go to jail.

One day this man was living the high life, enjoying all the things that his illicit money had bought, and the next day he is a broken man, expecting to go to jail.

Greed has a funny way of perpetuating itself.  You do things you would have never thought possible, just for the lure of a quick buck, or two, or 50 billion.  Lives are ruined.

Another sad point to this story is the fact that for years many top wall street gurus suspected that something was up with Maddow and his company’s amazing returns.  They thought he might be doing some insider trading, or something along those lines.  But instead of looking for someone to investigate them, or running the other way with their money, they invested with him because his returns were so good.  They didn’t care if he was doing anything illegal.  They continued investing with him because of greed.

Greed destroys lives

What does this situation tell us?  Whether you’re dealing with large amounts of money, or with billions of dollars as these men were, you need to guard against becoming possessed with greed, and the love of money.  We need to be content with the things we have, and when we do come to situations where we can deal with integrity or not, we need to remember these words:

But godliness with contentment is great gain. For we brought nothing into the world, and we can take nothing out of it.  But if we have food and clothing, we will be content with that.  People who want to get rich fall into temptation and a trap and into many foolish and harmful desires that plunge men into ruin and destruction.  For the love of money is a root of all kinds of evil.  Some people, eager for money, have wandered from the faith and pierced themselves with many griefs. 1 Timothy 6:6-10

These men, who by all accounts were very generous and kind men otherwise, were possessed with greed, and allowed themselves to do things that they knew were wrong, just for a quick buck.   We need to remember that even in our own lives we’ll be held to account one day for our own actions, and we need to guard our hearts against this type of greed.  If we don’t, the results, while maybe not on the same scale, can be equally as ruinous.

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Greed. It Never Ends Well.

November 2008 was a banner month!

November 2008 was by far the best month that this site has ever had. We had our most visits and page views ever, as well as going over 300,000 page views for the life of the site. Who could have imagined that we would see this much traffic on our lowly little site!  Look at the stats and the graph below to see just how much we’ve grown even in the last few months!

November 2008 Stats:
78,364 Visits
106,971 Page Views

All Time Stats:
218,550 Visits
312,818 Page Views

Top 10 referring sites for November

We get a lot of traffic from other blogging friends out there.  I’d like to take a moment and thank a few of htem here.

Here are the top 10 referring websites for November:

ncnblog.com
ptmoney.com
moolanomy.com
frugaldad.com
twitter.com
mightybargainhunter.com
remodelingthislife.com
mydollarplan.com
kingdomfirstmom.com
sensetosave.com

Top 10 posts on Bible Money Matters

The content on this site got over 100,000 page views last month.  Here are the top 10 posts in terms of page views:

• Stimulus Check: Is it on the way, and is it even a good idea?
• Are we going to get another stimulus rebate check?
• Create your own stimulus check
• 5 Ways to make some extra money
• 7 things you shouldn’t do in an economic crisis
• Bush and Bernanke support a new stimulus package
• Financial Peace University: Dumping Debt
• Step by step guide to making money with Cash Crate
• 7 things you can’t do if you want to stay out of debt
• Using the envelope system to control your spending

Once again, it looks like people want to read about the following topics:

1. Getting a stimulus check/”free money”
2. Earning extra income
3. Controlling spending and reducing debt

Very interesting.  I’ll keep this in mind for future posts!

Other News

• Cash Crate is still bringing in a ton of revenue for me, I made almost $180 last month using the service.  If you haven’t started using the service already, you can learn how to use Cash Crate by  clicking here for my step by step guide.
  
• We’ve been using the envelope system for just over a month now, and it has been amazing how much less we’ve spent in our problem categories (hundreds less, for those of you who want to know).  If you want to control your spending in your own problem categories, give it a try!
• We’ve been teaching Dave Ramsey’s Financial Peace University for several weeks now. It’s been a fun experience, and it’s satisfying to see people improving their situation by using his common sense techniques.  Interested in his class?  Find a class here or read our post series:  Dave Ramsey’s FPU

Stay tuned for more great things in December, and the new year!

Copyright © Bible Money Matters - please visit biblemoneymatters.com for more great content.


November Site Numbers And Recap

photo credit: Tony the Misfit

Sounds like a stimulus plan is in the works, to be signed by President elect Obama once he is sworn in.  From the Wall Street Journal:

Aides to President-elect Barack Obama and President George W. Bush are rushing to craft measures to shore up financial markets and prevent a policy vacuum from further harming the economy during the transition of power between the two men.

Mr. Obama’s team is putting together a new economic stimulus plan containing more than $500 billion in federal spending and tax cuts over the next two years, Obama aides and advisers said Sunday. That package would be far more aggressive than anything envisioned during the campaign.

Democratic leaders in Congress are preparing to rush passage shortly after New Year’s to have a stimulus-plan bill ready for Mr. Obama to sign once he is inaugurated Jan. 20.

In addition to a stimulus package Treasury secretary Paulson has signaled that he is considering using the second half of the $700 billion bailout to make it easier for households to borrow money, and avoid foreclosure.

Mr. Bush’s outgoing Treasury secretary, Henry Paulson, is now considering a more activist stance in his final weeks in office than he had signaled as recently as last week. He is considering tapping the second half of the government’s $700 billion financial-industry rescue fund, and rolling out new programs in response to worsening market conditions, according to people familiar with the matter.

Among other things, he is seeking ways to make it easier for households to borrow money. He is also looking for ways to reduce the burden of foreclosures on homeowners.

Extraordinary circumstances call for extaordinary measure, to be sure.   But I can’t help feeling that most of them, Democrats and Republicans,  are just grasping at straws right now.  They are trying one thing, and then if that doesn’t work right away – they try another.  They’ll keep trying to find something that will work until our economy gets back up and running.    I for one hope that it’s sooner rather than later as the government may do more harm than good in the meantime.

In another article from the Journal they talk about Obama’s stimulus package spending priorities, as well as Republican rebuttals.

He ticked off a list of priorities that included: creating 2.5 million jobs, and spending on roads, bridges, schools and clean-energy programs. Jason Furman, the Obama campaign’s economic policy director, briefed Democratic leaders and conservative “Blue Dog Democrats” last week on the shape of the proposed stimulus, according to senior House aidesThe plans brought a quick retort from House Republican Leader John Boehner of Ohio. He said lawmakers “should start listening to the American people, who do not believe increasing government spending is the best way to put our economy back on track.” He proposed eliminating the capital gains tax, which is currently 15%, as well as other tax cuts.

As I’ve stated on here before, I don’t think we should count on either party to get things done, and we need to create our own stimulus checks by working extra hours, selling things online, blogging, delivering pizzas or papers, and whatever else you can think of. Waiting on the government to fix things is going to mean a long disappointing wait.

What are you doing to better your situation right now, or are you waiting for a government stimulus check? Would you be disappointed if a new stimulus package didn’t include stimulus checks to taxpayers?

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Obama Considers $500 Billion Stimulus Package For Early 2009