Open Thread on the "Stimulus"

[WestSideBilly]

[jon]

The tax cuts don't really matter, because they will raise them later anyway or else people will refuse to buy T-bills. In the meantime, letting people keep more of their own money will let them make purchases and thus generate jobs to get people out of unemployment. If the government insteads just taxes and then hands out the money, it doesn't create jobs and simply reduces people's motivation to make the sometimes difficult adjustments to their life to find a new spot in the economy.

[WestSideBilly]

The only new spot in the economy right now is the unemployment line.

[rose-colored-coolaid]

[Lake Hills Renter]

[rose-colored-coolaid]

[jon]

"Nobody is spending, and lower taxes simply don't matter right now."

The savings rate is up to 3.6%, which is high by recent standards, but in spite of all the hype and scare tactics, the overall economy is only a few percent off of recent highs. While some people will spend it immediately, others may be saving up for something later. While that saving won't help in this recession, to be fair you have to give people the money on an equal basis. So to get the desired effect, you have to gross up the expected marginal savings rate.

If you have the government spend the money directly, then there will inevitably be waste, fraud, and abuse. To get the desired effect in that case, you have to gross up by waste. I would rather allow for expected savings than expected waste, even if it is a greater amount needed. The saved money will be put back into the treasury anyway, and it is not wasted, provided that every person is treated equally.

Of course well thought out infrastructure mega-projects would be the best, but there just aren't enough of those that have been planned out, and rushing through the planning could end up with waste or worse, as in the case of badly built bridges, etc.

[biliruben]

Why wouldn't the actual planning be considered stimulus as well? In other words, why does everyone imagine stimulus as a bunch of dudes digging a ditch? Why can't it first be architects, accountants and engineers planning the project?

[The Tim]

[WestSideBilly]

[jon]

[FreedomLover]

[WestSideBilly]

[jon]

[WestSideBilly]