Quote:
Originally Posted by Arles
One thing I'm curious to hear what you guys think about is the idea of a 1-year cap gains holiday. Basically, the quickest way to improve the economy/confidence is to get as much money into the market as possible. If you raise (or even hold) cap gains rates, you will add even more disincentive to invest given the shaky confidence. I will admit I don't know the "cost" of this, but it seems like it may be worthwhile item to investigate.
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Well, the first cost is another $120B to the deficit (
source).
The second is that you're just delaying the inevitable. But I realize that's part of the idea- take the drastic measures at a drastic time to stabilize things. However, you'll probably have some increased traffic initially in 2009 but then things would go back to the original problem of, well, not much value and worry in people's minds.
And, ultimately, it doesn't address the actual problem. Who wants to throw around a ton of cash when you're not sure it's going to be worth anything, even if there's a discount on doing that activity? Just because they lowered the price on trading mud, doesn't mean a lot of people are going to be trading mud tomorrow
SI