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econlog.econlib.org - 1/22/2009
The Case for Stimulating Profits
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(January 21, 2009 07:59 AM, by Arnold Kling) I am going to endorse the idea that Bryan Caplan called smart stimulus. if you cut employers' share of the payroll tax, this puts money in employers' hands, not workers'. But the indirect effect is to reduce the labor surplus;...

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The visible hand in economics:  British reject “smart stimulus”: Should we?

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British reject “smart stimulus”: Should we?
The visible hand in economics — ... Just before I began writing my ideas I saw this post on Econlog on a “smart stimulus”. In the post they support the idea that cutting the employers share of payroll tax would solely give money to employers (as wages are sticky). This money would both support employment by lowering the relative price of labour (which is too high given the shock to productivity), and it would incentivise “business activity” by increasing profits. ...

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