My Stimulus Plan - Part 2

If you've read my last post on how I would stimulate the economy, you've probably come to realize by now, that I'm no economist.

However, undaunted, here's Part 2.

Some stuff I wouldn't do to stimulate the economy.

I wouldn't offer tax breaks to small business or the middle class. GASP! Not that I'm a mean guy. I think both these people deserve all the breaks they can get. Heck I work in a small business. I just don't think that during this economic climate, the mindset of either middle class or small business would be to invest in job creation or spending.

I'm probably wrong, but if you put $1,000 buck in the hands of everyone, I'm guessing that after food and rent, we might actually pay a charge card bill. It's not likely you'd find us in a new car showroom.

Small businesses would likely hoard any additional capital to make sure they could meet short term obligations, like payroll (which I suppose you could argue is really job retention, not job creation). I'm okay with a temporary payroll tax cut for small business to sustain employment.

At any rate, in a climate where people are uncertain about their future, it is against human nature to run out and spend, spend, spend. No spending, no economic stimulus. That's why the government has to do it.

Perhaps we can help people in a different way. How about government backed loans at 5% for home owners, who are about to lose their house due to inflating ARM interest rates. Doesn't apply to 2nd homes, rental property - just primary residences. These loans would be 100% backed by the government and managed by your local bank. Unfair you say? Yes it is. But it's also unfair for those of us lucky enough to be able to pay our mortgages to have to live in neighborhoods where houses are becoming abandoned, deteriorating our home values and the quality of our neighborhoods.

I like the idea of subsidizing car purchases with tax rebates, but I'd do it for cars that offer 30 mpg or better or hybrid technology. No sense in creating demand for our old, bad, gas guzzling habits.

I also like the idea of subsidization for weatherizing homes and business and subsidizing green power projects.

How about a 2yr 100% interest tax credit on capital investments over $100,000 (excluding buildings). If manufacturers wanted to upgrade equipment, they could do so with zero finance effect for two years.

Oh, and lets complete the levies, and rebuild the hospitals, police and firehouses around New Orleans. And lets make sure they're built to 500 year flood standards.

Just a few ideas. Members of Congress, feel free to make these your own.