Forget About the Candidates, What is Your Government Doing to Fix the Economy Now?

Here at BlogHer we have looked at how the leading presidential candidates promise to address issues of interest to the community based on the Voter Manifesto. And while it is important to do so, the economy is tanking now and people are hurting now and nothing any candidate promises to attempt to do a year from now will put money in your bank account, gas in your car, pay your mortgage or put food on your table. Therefore, let's take a look at what the government is doing right now to help struggling Americans out.

Have you received a letter from the IRS telling you that the check is in the mail? Marie/y at Work In Progress did and she has concluded that heart attacks are part of the economic stimulus package:

Jeez — can’t they lighten up? Make it look like a winning Publishers’ Clearinghouse Sweepstakes entry or something?! Get people happy to see mail from the IRS, not heart-attacky.

Jennifer at Daily Diatribes: The Deranged Ramblings of a Suburban Soccer Mom on the Edge is blunt in stating what she believes the pinheads who run the federal government want us to do with those checks:

And remember, this is America: if you get that check, head to your nearest mall and SPEND IT!! For God’s sake people, don’t HOARD it! Go to the Gap and buy a new wardrobe! Don’t pay bills with it because that would be UN-AMERICAN!! SPEND, SPEND, SPEND!!!!!!

The tax rebates are part of the confusing at best Economic Stimulus Act of 2008. After reading up all about it I'm still not clear exactly how this is going to make either the economy or my life better but I'll try my best to help you understand how this will or will not impact your life.

An article on The Winners and Losers of the Stimulus Package from Fox Business speculates that the big winners might be accountants (for making the complex calculations for determining the amount of the rebates), mortgage bankers for refinances under the higher loan limits and the losers will be the unemployed who received goose eggs in this basket of government goodies.

Some experts are not optimistic that this package will do much to stimulate the economy and would rather have seen more direct spending from the government.

The stimulus package will probably give the economy at least a small jolt, experts said. But some economists think it could have been improved by more direct spending instead of business tax breaks.

"It's not an optimal package," said Jared Bernstein, an economist with the Democratic-leaning Economic Policy Institute. "From the perspective of bang for the buck, you could have crafted a more effective package."

The key elements of the stimulus package are the tax rebates and temporary changes to government backed loan limits. It does nothing to address unemployment, foreclosures (there are some separate efforts focusing specifically on the mortgage crisis), the falling value of the dollar, rising gas prices (though arguably there is little the government can do, and nothing the presidential candidates can promise to do to affect those, certainly in the short term) or the price of food on your table (part of the problem is that the competition for using food crops as fuel to address rising gas prices is driving up the price of food as well as is the rising price of fuel used to transport food).

Two professors at the University of Washington analyzed the stimulus package and concluded:

The almost-uniform praise by the chattering classes and the press of a process that led to a flawed economic stimulus legislation as exemplary bipartisanship is deeply disturbing, bordering on a national delusion.

Rather than coming to praise this process, we'd like to bury it. It is just one more depressing example that the federal government lacks the will to cope with the major economic problems that threaten the United States.

But the package is what it is so what do you need to know?

How much of a rebate will you receive and how will you get it?

Certainly the IRS FAQ is a good place to start. However, if you want plain English explanations take a look at columns from Eileen Ambrose and Dan Thanh Dang in the Baltimore Sun, Karen Datko at MSN Money's Smart Spending Money Blog or Kathleen at My CFO on the Go! Kay Bell's blog Don't Mess With Taxes is also an excellent resource.

The change in the loan limits will help some homeowners refinance into lower rate mortgages and lower their monthly payments. Also, this change will help some buyers purchase homes in high-cost areas of the country which might slow the rate of some markets declining by helping to help buoy home prices. The increased limits ($729,750 up from $417,000) expire at the end of the year.

Even if the economic stimulus package will not be riding to your economic rescue, Alina Tugend in The New York Times suggests you "resist the impulse to panic over finances." If the stimulus package will affect you, please share your story. What will you do with a tax rebate? Will you refinance or buy a house with the new limits?