Monday, February 02, 2009

Republican Stimulus Plan Provides Immediate Relief

Unlike the Dem Plan which is all about the pork-barrel and $500 next year sometime. Here is the highlight of the GOP plan.

McConnell also said Republicans favor cutting the two lowest tax brackets as a way to " put money back in people's hands directly." If adopted, that would reduce the tax rate from 10 percent to 5 percent for the first $8,350 in individual income for the current year, and $16,700 for couples. The tax rate would be lowered from 15 percent to 10 percent on income between $8,351 and $33,950 for individuals and between $16,001 and $67,900 for couples.

So that means they will start getting more money in their next paycheck and not next year after we are already recovering from the recession. Nobody can argue against receiving more money each paycheck. The other part of the plan tackles mortgages:

The goal was to have banks lower the interest rate to 4 percent or 4.5 percent on 30-year fixed rate loans for many primary residences, by directing Fannie Mae and Freddie Mac to buy the mortgages.

In other words the US Government will provide a low interest/fixed interest loan that is below the rates other mortgage brokers charge. That means Uncle Sam has become a mortgage market monopoly that will funnel all new mortgages into government controlled Fannie and Freddie. In other words nationalizing the mortgage industry in the US. Let's hope the cure is not more destructive then the cause.

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