The news has been talking about a $300 billion tax break/rebate/handout to citizens. That's about $1000 per person. The theory is, we will all rush out and spend the $1000 on something. Or at least, be grateful to the Obama administration for the money. If everyone spends $1000, then stores will order $1000 worth of merchandise, and factories hire workers and buy raw materials and we are out of Great Depression II.
Does this rosy scenario work in real life? Most Americans are worried about loosing their jobs, have humungous credit card debts, and have seen their savings vanish in the stock market crash and the real estate disaster. Most rational Americans will use the free money to pay down debt or save up for a rainy day. Although it's raining pretty hard now, a pink slip makes things get a lot wetter. In short, much as I like the idea of free money for me, I don't think it's going to do much to stimulate the economy.
Give the tax breaks to business. One of the reasons so much manufacturing has moved to China is that taxes on business are lower in China. US businesses pay 35% on profits, higher than nearly every other developed country. Lower that tax rate and more US businesses will survive Great Depression II and/or decide to retain operations in the US as opposed to outsourcing them to China.
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