It’s April 1st, which means you have to read everything twice to make sure it’s real and you weren’t the victim of an April Fools prank, like the ones that Baker at Man vs. Debt pulled, or the light-hearted piece PT from ptMoney penned today.
“I’m From The Government, And I’m Here To Help.”
Not quite as funny is the increasing level of dependency we have on the government to care for us when the chips are down. With the “Great Recession” and a concerns of a double-dip housing collapse, there have been numerous federal incentives to stimulate and inorganically sustain the economy. The necessity of these programs are debatable, but programs like Cars “Cash for Clunkers”, Appliances “Cash for Clunkers”, and the First-Time Homebuyer Tax Credit have brought extra money to the pockets of consumers. It is redistribution of wealth at its finest!
Don’t Depend on Government!
Incentives from the government are nice to those benefiting from it, but the minute you begin to expect the assistance, you run into the problems, which at least are minor inconveniences and at worst horror stories. Here’s a few examples:
- Home Buyer Tax Credit — A buddy of mine just bought a house last year, after living in his previous home for 5 years. When tax time came around this year, he expected that $6,500 rebate from the government. Awesome, right?!? Wrong, because he bought the home before November 6, 2009, which means he doesn’t qualify. Luckily for him, he has a decent emergency fund and wasn’t depending on the money.
- Appliances “Cash for Clunkers” — There was a fellow Personal Finance blogger who had a parent that purchased a new dishwasher under the guise of the Appliances “Cash for Clunkers” program. Turned out, their state was not a participant in the program. So an old appliance was replaced, but no tax rebated given. I couldn’t find the link to save my life, so forgive me this once for poor journalism. Just remember to check local laws and stipulations on which appliances qualify for tax rebates.
- State Pension Plans — Government jobs used to be looked at as secure jobs even if the pay was below market value. Now, teachers are being laid off by the thousands, and pension plans are going broke. Chickens are coming home to roost with the excessive benefits offered to public employees, and aren’t sustainable at current levels. If you are a public employee, you can’t solely rely on a pension to provide for your retirement.
- Income Tax Refunds — Ahh, there’s nothing like getting a HUGE tax refund, right? All that money that would’ve been spent is now saved up and sent directly to you in one fell swoop from the IRS and your state government… unless, of course, you live in California. Last year, the Governator and his Golden State legislative compadres faced a budget shortfall, and considered issuing IOUs because the state had no money. Maybe that’s a good reason to argue that “Size Does Matter” with Tax Refunds.
- Social Security — The jokes about Social Security have been around for at least an entire generation now. The bottom line is, you simply can’t depend on Social Security to be there for your retirement. Consider it a nice bonus, but don’t rely on it, because it may not be there when you retire.
- Unemployment – I can’t forget my recent battles with being denied unemployment benefits. Just remember, you don’t always qualify for the benefits. Pay close attention and follow all the proper procedures, otherwise you may end up with nothing to fill the gap between employment.
What do you think? Have you expected something from the government and it didn’t come through? Do you budget or plan to include government incentives, or consider them an added ‘bonus’ if they come through for you?
photo by smemon87