National Retail Federation, the largest retail trade association in the United States, has asked President-elect Barack Obama for a pie of the stimulus pie. I knew this was going to happen. The federation asked Obama to add a series of sales tax-exempt shopping days to a coming economic stimulus package in an effort to revive consumer confidence and spur spending. Wow, since everyone is forming a queue for economic assistance from the taxpayer, then where is Main Street’s share?
The National Retail Federation called for three periods of sales tax-free shopping that would last 10 days each in March, July and October 2009. The trade group estimates that it would save consumers about $20 billion, or $175 per family.
Under the industry group’s proposal, which would exclude alcohol and tobacco sales, the federal government would reimburse states for the lost tax revenue. State sales tax rates range from 2.9% to 7.25%, the group said. The five states without a sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — would also receive monies.
In a letter signed by the chief executives of retail chains, including J.C. Penney Co., Saks Inc. and Petsmart Inc., the NRF warned the situation was “critical,” with consumer confidence in October falling to the lowest level in the 41 years data has been collected.
“Without swift, additional Congressional measures, the current economic weakness could worsen, creating a more rapid downward spiral — beyond what economists are predicting for 2009 — in the years ahead,” the NRF said.
The group said it supports Mr. Obama’s efforts to create a long-term stimulus plan to generate jobs by rebuilding the country’s infrastructure and investing in public schools and alternative energy. However, the NRF said short-term incentives are also needed to encourage consumer spending, which accounts for 70% of the U.S. economy.
In the third quarter, spending by consumers fell 3.7%, the biggest drop in 25 years. The fourth quarter’s results are expected to fall even more. Source: Wall Street Journal
This Christmas season will be dismal for the retailers as well. But exactly where do we need to draw the line? People are hurting in this country and Main Street needs assistance before the retailers. Everyone is looking for a handout these days. President Bush and Hank Paulson handed billions to the banks to stimulate the economy, but that has backfired. Wouldn’t it have been better if they had given some of that money to homeowners to pay down their mortgages or to put measures in place to freeze foreclosures? Who is going to line up next? The grocers?
To read the entire article in the Wall Street Journal, CLICK HERE….
General Motors just hit pay dirt. According to Bloomberg, the Fed used emergency powers on Dec. 24 to grant GMAC’s bank conversion, citing turmoil in financial markets and the potential impact on Detroit-based GM as the biggest U.S. automaker taps emergency federal loans to stay in business. So, GM will be double-dipping, if you will. The Fed said that by converting GMAC to a bank “would benefit the public by strengthening GMAC’s ability to fund the purchases of vehicles manufactured by GM,” the Fed said in its order. GMAC was shut out of credit markets this year after piling up $7.9 billion in losses dating from the middle of 2007. Really? Didn’t GMAC make it quite clear that they were not lending to anyone without an A+ credit rating?
Once again, the Feds are looking out for the big guys and not the little people.
To read the GMAC article in its entirety, CLICK HERE…
Filed under: Barack Obama, J.C. Penney, National Retail Federation, Petsmart, Saks Fifth Avenue, Stimulus Plan, Tax-Free Shopping
Black Political Thought 