Tuesday, September 07, 2010

Poorly Aimed Mini-Stimulus Arrives

Versailles-on-the-Potomac can't disabuse itself of the notion that further Keynesian pushes will accomplish something noteworthy.  It is launching a new research tax credit presumably to win back businesses burned by health-care reform's new tax burden.  It's also trying to goad lenders into writing off 10% of a troubled mortgage. 

I'll say it right now.  Both of these ideas are a waste of time and money.  The R&D thing is a net zero, as it will be paid for by rolling back other corporate tax loopholes.  The mortgage write-off plan is DOA as soon as banks realize that writing off 10% of a loan that's more than 10% underwater will destroy their balance sheets. 

I will give some credit to the proposed $50B infrastructure stimulus provided that it is actually spent on those assets in the public commons that only government can influence:  ports, river locks and gates, railway rights-of-way, and such.  If it's wasted adding sidewalks on roads to vacated suburbs, forget it.  That's where the last stimulus effort mostly went (with a few exceptions like upgrading barge locks on the Mississippi River).

I read about stuff like this because I need amusement.