Make It A Fine 2009!

Jan 5th, 2009 – Comment

Hello My Friends! I hope you all enjoyed the best of the holiday season and plan on making 2009 a fine year. Its been a few weeks since I posted after the change over to the new site format. I am a dyed in the wool technophobe and having to learn a new system always requires that I […]


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Lou Schizas is an equities analyst, investor, entrepreneur, professor and television and radio personality – and a true believer in the happiness-inspiring powers of capitalism.


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Lou SchizasHello My Friends! I hope you all enjoyed the best of the holiday season and plan on making 2009 a fine year.

Its been a few weeks since I posted after the change over to the new site format. I am a dyed in the wool technophobe and having to learn a new system always requires that I am in the right frame of mind to even get there. Plus the holiday season kept me very busy spending time with friends and family.

Before I go any further I wanted to thank Michael Hainsworth from hainsworth.com for all his efforts in taking happycapitalism.com to this new level and to Ken Reid from impressionnewmedia.com for launching the site in 2007. They are both extremely talented in many fields and its their efforts that have allowed this capitalist to get online.

With 360 days left to make money in 2009 lets not waste time:

Hey Lou, I love hearing you in the mornings on 640 and your defence of the free markets. However, I’ve been surprised by your repeated endorsements of stimulus through infrastructure.  I also favour that policy, but think tax cuts (or even a tax holiday for two months) would be far more successful in stimulating economic activity in the short term. I thought you might want to check out this editorial from Investor’s Business Daily which supports a stronger emphasis on tax cuts than on infrastructure: http://www.ibdeditorials.com/IBDArticles.aspx?id=315792191143684 Best regards, Jonathan

Hi Jonathan, Thanks for listening to AM640 and for the link to IBD. Both are greatly appreciated! I agree that tax cuts make their way into the economy the fastest but perhaps with not as much of a bang. My research indicates that for every dollar in tax cuts you get about $1.50 in additional spending in a three year period while one dollar of spending on infrastructure generates about $3.50 in additional spending over ten years. Its a question of quick nickles or slow dimes. The other thing to keep in mind with tax cuts is leakage. Some of the cash gets spent on goods from other countries and some of the cash gets used to pay down debt. Some even goes into savings. Clearly the problem with infrastructure spending is that we tend to ignore it till its too late or our backs are against the wall. Think of New Orleans. $2B to fix the levees was viewed as too expensive for a decade till Katrina nearly destroyed the city.  The final cost of saving New Orleans have been estimated at $200B. A stitch in time saves…. I guess my point is that with bridges and highway overpasses collapsing and roadways needing repairs we have failed to maintain the legacy we inherited. In addition I don’t believe that  we have done enough to continue to expand all of our social infrastructure. Regarding the Japanese model cited in the IBD article they got it wrong in that they didnt expand infrastructure, they gold plated it. Too few projects at too high a cost is not the way to go. If we want our investments in infrastructure to create the most economic impact we have to look to private public partnerships ( P3) like the 407 Highway and if we are going to build roads  we should look at the opportunities to develop the land around them. That’s a sweet kicker if you do it right. Today Obama is suggesting that their $775B stimulus package will have a $300B tax cut component which works out to 40% of the total. Maybe a little of both will work. But trust me we have to stop wasting resources and we need to commit to maintaining and expanding our transportation, education, energy, sewage, water, and communications infrastructure! Happy Capitalism!

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