Jan 8, 2009

Stimulus plan - perspective

Although I think a stimulus plan (and a big one) is the right thing to do I am stuck by the numbers being thrown around. Yesterday I heard that the total package could amount to as much as $1.3 Trillion.

A quick search of the net (only looking at a few results) indicates that in recent years there are about 130 million individual tax returns filed annually. That divides into the other figure nicely -- $10,000 per tax return (tax payer/family). Implementation of such a plan is a complex process involving art, science and politics but I can't help thinking about this in terms of sending every tax return filer a $10,000 rebate check!

Jan 6, 2009

Adventures in Loan Sharking

More junk mail from the banks this week. With rates at all time lows, a letter from Bank of America says we're pre-qualified for some huge loan amount. The reality is probably that this is boiler-plate text and if one were to apply they would get a much lower limit.

Anyway, the fun part is that the initial interest rate is 7% (sneaky, they call it 6.99%) but the fine print says that if you miss a payment they can adjust the rate up to 28% (sneaky, they call it 27.99%).

Obviously, if you can't make your payments QUADRUPLING the interest rate will only make it harder, if not impossible. Seems more like the financial equivalent of a mob enforcer breaking your legs if you can't pay up.