As originally envisioned by the man on golf cart, the proposed payroll tax cut made no sense, because it was an effort to stimulate economic activity at a time when the government was mandating business closures in the name of public health. The idea clearly hasn’t gone away, however, and conditions are somewhat different. Would it make sense today?
No–not unless and until the public health problem has been brought under much better control, and a conventional stimulus would be appropriate. We’re not there yet; we’re still in compensation for restrictive regulations mode. We should welcome the proposal for one reason, however; GOP efforts to deplete the Social Security and Medicare trust funds will be difficult to explain to the elderly in November.