Again, we're not understanding each other. I thought you were referring to how fast the (refund) money got into the hands of taxpayers (to create demand by spending the money).
I care little at this time for studies etc that say won't spend the extra money. For one, our biggest problem has been people spending all they have plus what they can borrow. It's beyond vounter-intuative for anyone to claim that the extra money won't be spent. Tax reductions are not "magical money" that people treat differently. I'v ebeen tax CPA for about 30 years and seen many people who purposefully plan a getting a refund at April 15. These people all blow the money on something (vacation, new car downpayment etc), none put it into saving.
Moreover, too many people cannot now afford their bills, whether house payments or medical insurance/expense. But even if they did manage to save some or al of the money, that would be a good thing. Those saving would provide liquidity for other areas, something badly needed that none of the government's many efforts have so far been effective at helping.
Except tax credits with a deadline have immediate impact, if they're large enough. Tax cuts don't. This has been measured and proven quite conclusively, people save their tax cuts but businesses hire more immediately if there's a tax credit (but only if it's large enough which the recent one probably isn't).
If I understand you correctly, the Investment Tax Credit would be a good example of this - influencing behavior rather quickly (the 'refund' part comes later). While I generally think the ITC is a good thing, we're back to same proble(s): It's damn hard to bank financing for $250K of equipment, and who wants to? You buy when you need to because fo demand, generally we don't have enough demand to justify such outlays now.
As regards tax credits and hiring: It's not been proven it's been opined. To hire, unless the overnment starts crediting it as above 100% of the cost you must have a need. We mostly lack taht need now (although soem companies are doing overtime but that is because of another problem - uncertainty). Yes, the current credit for certain new hires is far too low to influence hiring in a meaningful way.
Except it has little to no effect on people's spending habits. Again, it has been shown quite convincingly that tax cuts in payroll taxes (unless they're massive) end up resulting in people saving more, not spending. It has no stimulative effect.
Addressed above
It's not a question of you believing it, it's been statistically shown that unemployment payments are vastly more effective at increasing demand and spending than tax cuts. I have no idea what you're getting at with SBA or how that would stimulate spending by consumers, something you have yet again ignored is 68-70% of GDP.
It apeared to me you were offering only two choices for what needs to be done for our economy (unemployment benefits v tax cuts). THe "SBA" remaks refer to one of my posts above where someone asked directly what do i suggest.
I have no idea what you're referring to when saying "something you have yet again ignored is 68-70% of GDP"
Fern
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