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Nothing a payroll tax holiday can’t fix in short order.

Market tumbles further on Bernanke comments

Wednesday October 15, 12:46 pm ET

NEW YORK (Reuters) – Stocks fell to session lows on Wednesday, with the benchmark S&P 500 briefly tumbling more than 5 percent, after Federal Reserve Chairman Ben Bernanke said the economy faces a significant threat from credit market turmoil.


5 Responses

  1. «Nothing a payroll tax holiday can’t fix in short order.»

    I like this, and I am a guy who believes that group purchases via taxation are a good idea in general. But then i think that payroll taxes are a very bad idea to raise that money.

    Now wonder 🙂 why McCain and the Republicans in general are always keen to cut capital gains taxes, corporate taxes, and taxes on large incomes and large estates, but somehow they never advocate cutting payroll and indirect taxes.

  2. «“Market tumbles further on Bernanke comments” Nothing a payroll tax holiday can’t fix in short order.»

    However while being in general against payroll taxes, I find it a very bad idea to advocate any measure to rig the stock market, especially as the current level of asset prices in general, including stock prices, seems wildly excessive.

    Unless the plan is to have a Lake Wobegon economy where the “Plunge Protection Team” uses Greenspan Puts and Bernanke Swaps to ensure that asset prices are always above trend, as recently advocated by Martin Feldstein:

    «How to shore up America’s crumbling housing market»
    «The current decline of house prices is the natural result of the bubble that by 2006 had raised house prices to 60 per cent above their long-term trend. The sharp decline since then means that today~s prices are about 15 per cent above the trend level. But while a further 15 per cent decline may be inevitable, there is nothing to stop prices declining even further. House prices that could overshoot by 60 per cent on the way up could also overshoot substantially on the way down. During the past 12 months, house prices across the nation fell by an average of 16 per cent. The large overhang of unsold homes continues to create pressure for further price declines.»
    «A policy is needed that will permit the appropriate 15 per cent additional decline in house prices but end the risk of a further downward spiral.»

  3. @ Blissex,

    Fiscal policy tends to be slow to implement. This site advocates an ELR (employer of last resort) as an automatic stabilizer. A payroll tax would allow fiscal policy to target a lack of aggregate demand quickly.

    @ Warren,

    You should post more often to get the word out. I have posted links to your site and other post-keynesian sites over the years with little effect. Mark Thoma has a nice list of economic blogs.

  4. Winslow Says : “This site advocates an ELR (employer of last resort) as an automatic stabilizer.”

    You assume there are carrots left that will sucker this donkey into plowing for you. Everyone wants to be a chief, but there are not enough indians.

    My high school buddy who didn’t pay his child support because he didn’t like what their crackhead momma was doing to them with her drug dealing pedophile boyfriend was sent to jail for debtor’s prison. They told him WORK MULE or you will stay in here the rest of your life rotting in jail – he said OK – at some point enough MULES are going to sit down in jail and stop working slave labor and the system will break. His jailer said if it gets that bad we will just let you die from disease, or exposure, or starvation, or even shoot you, and my friend said after what I have seen this nation do to my kids – I WANT TO DIE. So how are they going to get the mule motivated? Splain it to me. 😉

  5. wins- yes, agreed, been slacking off in my old age!

    feel free to post any of this anywhere you would like to!

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