Economic Stimulus: Senate Changes that Could Affect Your Finances

Last week, the House passed an economic stimulus bill. For the people, this bill included a $7,500 tax credit for first-time homebuyers and tax cuts. (This tax credit was already in effect, but it had to be paid back over 15 years. Now, though, it is a true credit.)

Now the economic stimulus bill is in the Senate, and this august body has already added nearly a billion dollars more in costs. And some of them are meant to benefit us regular folks. Here are some of the items being added to the Senate version of the economic stimulus bill:

• 4% mortgage rate for home loans -- and refinance. For everyone, not just those in danger of foreclosure. This is nice, because it rewards those who have made good choices, rather than focusing exclusively on those who made poor decisions. The only problem is that many of us can't take advantage of a refinance because the home values have plunged enough to to mess up the LTV ratio.
  
• Moratorium on foreclosures. This is a 90 day reprieve for those in foreclosure trouble. The hope is that a moratorium will force mortgage lenders to negotiate terms of loan modification. We'll see how that works.
• Tax break for car buying. This is only for new (not used) cars. A tax benefit for the interest paid for financing, as well as one for state tax on the car, are offered. However, this is just to encourage some pointless spending. The costs you pay in financing a new car far outweigh the tax benefits. If you are going to buy, you are better off buying used. You will save more -- even without the tax benefit.

So, in the end, the changes amount to very little real benefit for the average American.

What do you think of the current economic stimulus package?