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Strategies & Market Trends : John Pitera's Market Laboratory
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To: Hawkmoon who wrote (4788)10/7/2001 5:39:49 AM
From: Yorikke  Read Replies (2) of 33421
 
I agree that granting personal tax cuts may very well see people begin to put some money in the bank. Since we no longer view the consumer providing liquidity through savings as very relevant, there is limited 'benefit' likely from personal income tax cuts.

I don't agree that corporations will pass money back to consumers in the form of price cuts. Given how businesses are run nowadays, it is more likely to lead to increased share buy backs and other 'financial' manipulation and not run to the pricing of product. It would be more padding to let badly managed firms continue to act badly.

I would think that heavy infrastructure spending would be the best avenue of stimulus. First of all we have some heavy needs in this area. Highways, bridges, river transport, rails, and Utilities are all badly in need of increased expenditures simply to return these systems to an 'as was' state of operation. Secondly, in many cases these are projects that would not take extended planning as the maintenance and rehab needs are clear. Money would be flowing into the economy and savings would result from increased efficiency in the longer term.

Finally I don't believe that the numbers being discussed are sufficient. In all likelihood we will need 150 to 200 billion in spending. It is going to be heavy deficit spending. I agree that it is time to face the reality of the golden calf of a debt free government.
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