So I haven’t seen the speech but I can tell from the chatter that the President is pushing for an extension of the payroll tax cut. Obviously I am very much in favor of this.

I also see that he is looking for tax incentives for businesses that hire new workers. This is not my preferred way to go but its better than nothing.

As always I want to be on the record AGAINST targeted stimulus. I think broad and bold is the better way to go especially with tax cuts.

Its really, really hard to think of how a tax cut could be “wasted.” The only problems are if it causes deficit financing issues or if it is paid for by later taxes that are really really bad.

Given that the medium term deficit is a complete non-issue and that the payroll tax is one of our most regressive taxes, I am little worried about that. Maybe you could fear that it would be paid for by some horrible tax on corporation but first that seems unlikely simply on its face and second even if you believe that there is a reasonable possibility of it happening you have to discount such tax hikes because they occur in the future and they do not occur with probability one.