The student news site of Guilford College

The Guilfordian

The student news site of Guilford College

The Guilfordian

The student news site of Guilford College

The Guilfordian

Free Money? I’ll take some

“Dear Taxpayer:We are pleased to inform you that the United States Congress passed and President George W. Bush signed into law the Economic Stimulus Act of 2008, which provides for economic stimulus payments to be made to over 130 million American households. Under this new law, you may be entitled to a payment of up to $600 ($1,200 if filing a joint return), plus additional amounts for each qualifying child.”

A few weeks ago, I, like millions of Americans received a notice from the government that opened with the above words. After reading the first paragraph, my interest was piqued. As I read further, I grew confident that a windfall was headed my way. All I needed to do was file my 2007 tax return, and the stimulus money would show up in my mailbox. I saw myself laughing all the way to the bank.

It wasn’t until paragraph seven that my newfound wealth disappeared before my very eyes.

Working students do not qualify for a payment “if they can be claimed as a dependent of another taxpayer.” Darn! That makes me and a lot of other Guilford students ineligible for the payment. The money we can’t receive will go to eligible Americans as part of the government’s effort to boost the sluggish economy.

The Economic Stimulus Act is designed to stimulate the economy by providing incentives for small businesses, encouraging job growth, and getting cash into the hands of consumers. Consumers are expected to reinvest the cash in the economy by spending it on products such as electronics, clothing and other items.

In the event you do qualify for a payment, don’t let misconceptions stop you from enjoying it.

Some of the misconceptions that surround the act include: the stimulus payment will reduce 2008 tax refunds, and Americans will have to pay taxes on the money received. Neither is true. Payments received will in no way affect future tax refunds, nor are they taxable.

But is it too little, too late?

Some economists believe that the country has already entered a recession. According to them, the stimulus payments don’t come soon enough, and since they are a one shot deal will not have much impact in turning things around. They add that these payments will increase the national debt.

A recession occurs when Gross Domestic Product (GDP) growth is negative for two or more consecutive quarters in a year. Economists note that employment rates fall, housing prices decrease, and business growth stops or slows dramatically during a recession. Sounds like everyday news to me. Nevertheless, the Commerce Department, which keeps track of the GDP reported small but positive growth for the last quarter of 2007.

The Treasury Department is unsure how much the stimulus package will cost. This is surprising and a little scary, since the country already has a huge national debt.

On March 31, the department reported that debt as $9,437,594,138,091.39. If that amount was equally divided amongst the population of Greensboro (237,316), everyone in the city would be a millionaire to the tune of about $ 40 million each.

But why count the money now?

The government has invested huge amounts of money in things that haven’t helped the average American see relief (e.g. the War in Iraq and the Bear Stearns bailout). When it decides that helping those who really need it can actually stimulate the economy, I say go for it.

The checks will begin to reach mailboxes sometime in May. All that taxpayers must do is file their tax returns, and the government will automatically review them to determine eligibility. As I mentioned before, dependent students are not able to benefit directly, but keep in mind that your parents will likely have some extra mad money (so give mom a call).

Happy spending! (If you are eligible.)

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