Open Thread on the "Stimulus"

[explorer]

So, Jon, why would a business use tax CUTS to create jobs when there is no DEMAND for what they produce to justify hiring in the first place. When they are struggling to survive, either in reality or in their own mind, what incentive do they have to give that up? NONE.

As has always been the case, tax CREDITS can actually have the effect of encourging job creation (especially R & D), in areas you can then specifically target.

In this stimulus package, I see direct subsidies and tax rebates/reductions, being used in place of tax credits far more often. Allowing businesses to claim credit for any contrived or real losses for the past 5 years will not create any jobs.

A good "stimulus" package would provide for dumping those businesses that cannot make it on their own and repurposing them to provide jobs and economic benefit in the future. This is NOT socialism, it's called developmental capitalism, and it's how Capitalism was redirected in Teddy Roosveldt's era.

If you just continue to prop up bad CDO's, Credit Swap paper, bad mortgages, rather than letting it flush itself out of the system, and starting the "stimulus" with a clean slate, you are not effectively dealing with the problems it creates.

Deflation is only bad for speculators and those who have grown inescapably dependant upon a bubble econony, IMO. Cash will be the new credit, so to speak, actually back up credit (capital), for a CONSUMER-oriented economy, and all the better to stimulate a little demand by the little guy.

Then I woke up... shock:

[explorer]

I will qualify the tax credit comment by NOT including Tax credits for buying homes as a targeted area.

[jon]

[sniglet]

[WestSideBilly]

[jon]

[sniglet]

Ironically, the latest attempts to jump start the US credit markets are actually just adding to over-all deflationary pressures by increasing debt.

[jon]

[rose-colored-coolaid]

[The Tim]

[EconE]

Anybody know if they nixed that Hollywood $250 Million +/- handout?

Gawd I hope so.