Stimulus debate continues with more stupid ideas

Part 2 from my previous entry. A very smart friend suggest that the government should just pay employers outright to hire people - $20,000 for each new hire. This is foolish, because employers are likely to react to this by hiring people to do little or nothing. For the government spending to get the economy going, it needs to be spent on something productive.

The same intelligent friend also said that all the stimulus spending would go 'straight to the Chinese' because we buy all our stuff from them. He was drunk, so I will cut some slack but still...this is just stupid.

Senate Republicans (supported by all Democrats) passed an amendment to the bill yesterday to 'fix housing first'. This would provide a $15,000 tax credit to anyone who purchases a home. It is estimated to cost $20 Billion. While this would certainly move some houses in the near term, it has little foresight. Homeowners whose jobs are in peril are not good risks. Too many homebuyers with too many incentives to buy is largely what caused the problems. This amendment came from the same Republican group who thought the House bill was too expensive, so they decided that adding $20 Billion more to it was just the right prescription. Afterall, tax credits are good spending is bad...or some such stupidity.

What's needed is just what the President proposed just after the election. Build up the safety net by extending and increasing Unemployment Insurance benefits. Prop up state budgets with free cash so they don't have to slash to the bone. Spend on infrastructure as soon as possible. I hope he sticks to his guns and the Congress goes along with it.