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jcoley2
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Join Date: Oct 2005
Location: Darien CT
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2009-02-09, 08:45

Quote:
Originally Posted by ezkcdude View Post
Because temporary tax cuts will not result in stimulus - the money will just be saved or used to pay down debt. Job creation is the only way to get us out of this mess..
Actually, you are incorrect. Tax cuts have a 3-1 multiplier effect. They are the best bang for the buck to stimulate the economy. If fact, lowering corporate taxes (both payroll and corp income taxes) would be the single best idea to jump start the economy. Individual corporate tax rate reductions on capital formation would be the next best idea: lower taxes on dividends, interest and capital gains.

Most other options in this "stimulus" (let's start calling it what it is: "spending") package have horrible track records on stimulating the economy. Most of the transfer payments which make up the vast majority of the bill have less than a 1 time multiple--meaning that cost more than what they benefit the economy.

Here is a good example: the bills contains incentives to train new workers to be trained as "green technology" workers. Sounds great, right? These workers can acquire new job skills and it is estimated that they can earn $60-80,000/year in these new positions.

But guess what: you know how much the tax incentives are to do this are? $250,000-300,000/worker!!! Now that's not going to stimulate the economy, but rather be a drag as we compound interest on the debt to pay for that worker and ultimately the principal.

You need to look to history as to what worked and what did not work in fiscal stimulus. This bill is a waste, and more importantly, will jack interest rates up over time (as we have to borrow the money). More importantly, the transfer payments will create another entitlement class that will be hard for any Congress or President to take away down the road.

The bill is the single worse thing that the US Government has ever proposed in our lifetime!!

Now that I got a job, I can buy more Apple products!
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