> gg wrote: > * $1 into permanent tax cuts returns less than $0.50. > > DOESN'T WORK! >
Here's a great Bloomberg article on why you're wrong that I've abridged ... just for you!! Jan. 30 (Bloomberg) -- Assume you are Joe Blow, the consumer. You have two houses, both with mortgages. You and your family live in one. The other one you can't sell right now or rent for enough to cover the taxes, upkeep and mortgage. You also have monthly car payments, tuition bills for two children in college and you are shelling out more than 20 percent a year to finance several thousand dollars of credit-card debt. Then as part of a broad-based economic stimulus program, the government cuts your taxes or offers you, say, a $1,000 rebate. Human nature and history suggest that you will use the money to reduce your debts. And even if you weren't in hock up to your eyeballs, the odds are you will deposit the extra cash in the bank -- rather than spend it -- especially if you don't feel secure about your job. About a third of Obama's $819 billion economic stimulus package, or $275 billion, consists of tax cuts for individuals and businesses Less than half of the personal tax cuts, or rebates, included in the Democratic Party's American Recovery and Reinvestment Plan will probably be spent in the first two years, according to Lawrence Mishel, the president of the Economic Policy Institute in Washington. "The rest will be used to pay down debt, build savings or buy imports, none of which help boost the U.S. economy," he says. Early last year, Congress passed, and President George W. Bush signed, a $168 billion stimulus bill whose centerpiece was about $100 billion in personal-tax rebates. Only about a third of the rebate checks, which ranged from $300 to more than $1,200 for some families, were spent, Mishel says. Others put the unspent portion as high as 80 percent. Solution? Issue vouchers to individuals or families that can be used to buy goods and services and that expire after a set period of time, say, a year, meaning they can't be saved. That guarantees the increased deficit spending and 100 percent of the $275 billion will be devoted to boosting demand -- the object of the stimulus program. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~| Adobe® ColdFusion® 8 software 8 is the most important and dramatic release to date Get the Free Trial http://ad.doubleclick.net/clk;207172674;29440083;f Archive: http://www.houseoffusion.com/groups/cf-community/message.cfm/messageid:287120 Subscription: http://www.houseoffusion.com/groups/cf-community/subscribe.cfm Unsubscribe: http://www.houseoffusion.com/cf_lists/unsubscribe.cfm?user=11502.10531.5
