User 268734

Obama's Tax Cut: A 'Mustard Seed' of Hope for Investors

Pretty shallow post, on two grounds:

1. Whether a tax cut will in fact deliver much of a stimulus at all depends upon the extent to which money not handed to the IRS instead circulates around the economy. Under normal circumstances a fairly significant multiplier effect could be anticipated - but it hardly needs saying that these are not normal circumstances.

2. Even if a tax cut does provide significant stimulus, its effect is unlikely to be any longer-lasting than earlier government handouts. It does nothing to address the fundamental cause of our current mess: a thoroughly broken economic model built on successive asset price bubbles, binge-borrowing (by households and governments), and overconsumption.

Of course, the 'mustard-seed brigade' don't care about any of this - they just want your money.