Sunday, January 20, 2008

My idea of stimulus. Just a couple of points.

One, Extend Unemployment Benefits. This is a no-brainer. It does nobody any good for families to make desperation sales of their homes, and end up living in their cars. In fact, it does alot of people bad for this to happen. Every desperation homesale puts downward pressure on all property values, and puts additional pressure on others to follow up by selling out at a loss.

Two, Increase Energy Efficiency Spending. My household is using less power this year than same time last year, but we're paying more. We're not alone in this. I'm not suggesting investment in Energy Development here, that's a separate subject from quick stimulus. In this case, programs similar to those brought about under the Clinton Administration should be brought back, and expanded. The Government should support individuals, families, and corporations in running more efficiently, and using less energy. Investment should be supported at all levels on energy efficient buildings, transportation, and business practices. This would benefit everyone by cutting demand, and thus, lowering prices. Remember, inflation isn't caused simply by increasing money supply, but also by increasing costs of production, particularly by way of increases in the cost of energy.

This kind of program has immediate effect by supporting new, targetted investment, but also long term benefit to participants by saving them money over the long term, which then can lead to additional investment over time.

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