The $8000 First Time Home Buyer Tax Credit offer is due to expire on December 1, 2009 and to qualify, your home purchase must close on or before November 30^th.  So if you are a first time home buyer, GET ON THIS ASAP. If, however, you absolutely positively, will not be ready to buy a home by November, then there is still hope out there. There are currently five, count em FIVE, bills on the table in Washington that propose to extend and tweak the current tax credit bill.

The most publicized proposal, has been introduced by Johnny Isakson (R-GA) who is responsible for getting the current tax credit bill passed. This new bill, The Home Buyer Tax Credit Act of 2009, proposes a non-refundable tax credit up to $15,000 for ALL primary residence purchases-not just by first time home buyers. The bill would also remove income limits that had prevented individuals making more than $75,000 a year from claiming the credit. This bill would expire one year after it was enacted.

According to Luke Mullins of USNews.com, Isakson argues that the current tax incentive is insufficient because it misses a second set of buyers who are essential to a housing recovery. “We don’t have a recession in first time home-buyers,” a statement from the senator said. “We have a recession in the move-up market.” The legislation aims to convince these “move-up” buyers that, despite falling real estate prices and mounting job losses, now is the time to buy that larger house.

The second bill floating around the capital, introduced by one Kenny Marchant (R-TX) proposes to extend the existing $8000 tax credit to June 2010 and expand it to all primary resident home buyers. It also adds provisions for a tax credit of up to $3,000 for homeowners who refinance.

The other three bills are all virtually identical to each other, each one proposing an extension of the $8000 tax credit to June 2010 and expanding it to all primary resident homebuyers. I suppose that in Washington, it’s just a matter of getting your name on a bill and trying to be the one that gets the bill actually pushed through.

Isakson’s bill is easily the most aggressive of the lot, and it is not going to be easy to get a bill like that passed. But as Mark Zandi, Chief Economist at Moody’s Economy.com says, “My guess is that if the economy does continue to struggle…if these rates stay higher and the scenario that the recession will end this year is wrong, then there will be another stimulus package early next year, and [the expanded tax credit] could be a part of it.”

So we shall see what happens. But whatever  you do, don’t sit back and wait for one of these bills to get passed. Like I said, if you have the means to qualify now for the $8000 tax credit, do so.

By Andrew Brentan

No one really knows what’s going to happen. Well, maybe there are, and hopefully those that know are the ones that helped put together the Financial Stability Plan (FSB) that was released Tuesday morning by Treasury Secretary Geithner. But it is kind of scary to think that the morning a plan to help stabilize our free-falling economy was released, the stock market shed 300 points. Economists are saying that the plan lacked too many specific details and that is why it sparked a drop in confidence in the markets. And confidence, it seems, is not in the vocabulary of anyone in the financial world these days. Paranoia might be a better term.

But in such times of financial paranoia, there can be a tendency to become paralyzed by indecision, unsure of what to do or how to approach the situation. This is exactly the time when our leaders need to take charge to make things happen, and I was impressed by President Obama’s speech on Monday to address the need to pass the FSP immediately. “The plan is not perfect. No plan is. I can’t tell you for sure that everything in this plan will work exactly as we hope, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans,”. We have never experienced a situation like this in the history of our country and as unemployment continues to rise, there is not enough time for a plan of this importance to get hung up on Capital Hill in a partisan battle of wills. Just look at the State of California to see what happens when two political parties can’t agree on anything. And despite the lack of confidence that Wall Street showed initially in response to the FSP, there were those who felt that despite the lack of details currently in the plan, it might just be exactly what we are all praying it will be. In Tuesday’s Wall Street Journal the following economists commented on the plan:

The “comprehensive” financial rescue plan – Financial Stability Plan – released by Treasury Secretary Geithner this morning is still missing significant detail, including an implementation date. There are far too many missing details to make this a satisfying announcement. Nonetheless – at first blush and without the benefit of key detail – the plan does appear to address the key problems of the financial markets at this point in time. -Ward McCarthy, Stone & McCarthy

It’s really not clear what the plan means; there’s an interpretation that makes it not too bad, but it’s not clear if that’s the right interpretation. The plan deserves praise for what isn’t in it, at least as far as I can tell. There doesn’t seem to be provision for mass purchases of toxic waste at premium prices; there also doesn’t seem to be a massive “ring-fencing” guarantee against private losses on bad assets. In that sense the plan is better than what the last few weeks of leaks led us to expect… So what is the plan? I really don’t know, at least based on what we’ve seen today. But maybe, maybe, it’s a Trojan horse that smuggles the right policy into place. -Paul Krugman, Princeton University

The size and breadth of the package show that the government recognizes the scale of the problem and suggests that it will be prepared to do more if necessary. And the terms of the new cash injections appear to have a greater chance of boosting lending than those seen in other economies. Overall, while the FSP may not be perfect, it is likely to have a beneficial impact on the financial system and increase the chances that the US economy sees a decent economic recovery in 2010. -Paul Dales, Capital Economics

I’ve said it once, I’ll say it again: I’m no expert. So if these people are telling me that this plan, though lacking some specifics, looks like it will address the problems that need addressing, then I’m 100% for it. In the mean time, someone please tell Wall Street to RELAX. The FSP is designed to help, so please refrain from causing the further diminishment of our retirement accounts simply because it lacks a few details. Thanks.

By Andrew Brentan

It’s happening. The State of California is broke, they can’t balance the damn budget, $4 billion of scheduled state payments are being delayed, people’s lives are being severely affected as a result, and it makes me want to shake somebody! I wish that all the law makers in Sacramento, including the Governator, would form a single file line outside my office door, and one by one I would invite them in so that I could SHAKE THEM. How much more helpless can we feel as citizens? Listen, I think it’s all good and fine that Democratic lawmakers want moderate spending cuts and tax increases, and it’s all good and fine that Republican lawmakers want no new taxes and deep spending cuts, but for the love of all that is good with the state of California, can you not come to a compromise already?!

The well publicized $42 billion budget deficit California is projected to reach by mid-2010 is resulting in spending cuts that are turning heads and causing uproars. Just last Thursday Sacramento County Superior Court Judge Patrick Marlette ruled that Governor Schwarzenegger does indeed have the authority to force tens of thousands of state workers to  take days off without pay. According to the Associated Press, “The two-day-a-month furloughs are scheduled to start Feb. 6 and would apply to all 238,000 state workers”. This move will result in the budget being cut down by a whopping $1.4 billion. But cuts like this seem like somewhat reasonable solutions given the emergency circumstances the state is facing. However, it is the stalemate in Sacramento that is now resulting in further hardships for people that depend on the state for a number of financial needs.

Nearly $4 billion of scheduled state payments are being delayed in an effort to prevent the state from running out of cash. Bobby White and Stu Wood of the Wall Street Journal interviewed the Controller John Chiang last week about this delay, which is expected to last 30 days. “I am very concerned about the potentially devastating impact to individuals, to families, to businesses,” he said. But “my principal responsibility at this time is to make sure that California does not go into default.” What a mess. So while the state lawmakers are “trying to hammer out a solution”, there are a lot of people undeservingly getting screwed. Income tax refunds are an expected and depended on stimulus for citizens, and local retailers and businesses. College students won’t be paid their educational grants, and welfare checks will be put on hold. Entire counties and cities, many of whom don’t have much money themselves, will be required to cover the costs of social service programs normally included among the state payments. When it rains it pours and this is a serious storm.

I do not know what goes in to balancing a state budget. If I did, I might be able to provide some concrete examples of how lawmakers might get over this hurdle. Or maybe, if I knew about balancing a state budget I’d understand more fully just how difficult it is to make it work. But we, the citizens of California (more specifically, those of us on the lower end of the tax bracket), are truly paying a hefty price for this budget stalemate. I learned the value of compromise a kid, why are extremely intelligent adults having such a difficult time giving up a little in order to reach a common goal? On family road trips, my brother and I would get into shouting matches over where we should stop for lunch. I wanted McDonald’s because I loved their chicken nuggets and he always wanted Burger King because he liked their burgers better. And boy oh boy, were we stubborn about it. But there were two ways that we handled such situations (or more matter-of-factly, how my parents handled such situations): 1.We would agree that we would stop at McDonald’s on the way there and Burger King on the way back, or 2.We’d go to Wendy’s. And there you have it ladies and gentlemen: A compromise! Chicken nuggets and tax increases, Whoppers, and huge spending cuts, it’s all the same in this, my fast-food metaphor for how to come to a compromise. If only it were that simple right? But, lawmakers of California, does this really need to be as difficult as you are making it? I can’t for the life of me believe that it is.

By Andrew Brentan

There was a lull in the music and announcements and cheers, and the masses that had gathered in front of the Capital Building seemed to hold their breath all at once in anticipation of Barack Obama’s grand entrance. Unable to bear the “silence”, the restless crowd began chanting, “Obama! Obama! Obama!” And then, as he emerged from the dark hallway of the Capital and into the low light of the winter sun, a chill ran down my spine. What was it about this inauguration that meant so much? What is it about this man and that moment that called to the hearts and souls of millions in this country and around the world?

Well, there are all the obvious answers: Being the first African American elected President, being the antithesis of the eight years we’ve endured with George W. as our leader, being a man who seems to “get it”, and a man who we, as a nation, can be proud to lead us and represent us. But I think at the heart of this momentous occasion is the fact that for so long we had taken for granted just how good we had it as a nation. Our American ideals and high standards lay buried and rotting during these years of complaisance and it impeded on our ability to effectively address the problems of our rapidly changing world. And when the walls of our comfortable and sheltered existence began to crumble, we became paralyzed— unsure of ourselves, and unsure of our leaders. Barack Obama has shaken our country from this paralysis and has brought hope back into our hearts. But more than that, he has inspired our people to unite and work hard to “remake America” as he put it, into a new nation that represents what we the people wish it to represent. He has made this vision of a new America seem attainable in the face of dire circumstances. And he has come to power at a time when Americans seem ready to once again work for more than just themselves; a time when Americans want to right what’s been wrong with our country for too long. It was all of these things, jumbled together into one big glob of emotions that made this inauguration special and historic, and filled eyes with tears, and sent shivers down my spine.

It has been an inspiring few days in our Nation’s Capital. The speeches, the songs, the crowds were all truly special and will be remembered for years to come. But inspiration, like this inaugural celebration is fleeting. We cannot allow ourselves to get complaisant again simply because we have elected a new leader that we have faith in. We must use this historic inauguration as a springboard of momentum to work to better our country and our world. Obama has lit the spark under the nation, showing all of us that it is possible to reign in change. And in order to produce the change we seek, a great effort from us will be imperative. “What is required of us now is a new era of responsibility – a recognition, on the part of every American, that we have duties to ourselves, our nation, and the world, duties that we do not grudgingly accept but rather seize gladly, firm in the knowledge that there is nothing so satisfying to the spirit, so defining of our character, than giving our all to a difficult task. This is the price and the promise of citizenship.” So let us celebrate today the inauguration of a man who represents our longing for change; let us celebrate the fact that we live in a country where a person of racial minority can become president; let us celebrate the hope that has once again united our country. But come tomorrow, the celebration ends, and our work begins.

Andrew Brentan, Image courtesy of Shepard Fairey/Obey, Barack Obama campaign posters, 2008