Financial Crisis - Solutions

Instead of stimulus and tax cuts how about some other solutions.

1. Cut payroll tax.

Payroll tax affects two levels, the employer and the employee. The more a company has to pay in payroll tax the less the employee gets and the less employees can be hired. So by cutting the payroll tax it allows businesses to keep their employees and some of the savings can be passed along to workers. Less people get sacked, so less money the government needs for social security and services. It is simple and everyone wins. It also means that the taxpayers themselves get some of the benefits, not the freeloaders.

2. Money to home loan payers, not the banks.

Instead of giving money to the banks so they can lend to home owners how about the same payment given to those with home loans with the provision that it can only be used to pay off the loan (this could be done directly).

First of all this reduces the amount of debt being carried by banks and gives them liquidity that can them be used to provide other loans. It also directly benefits those with home loans at 100% of the value instead of some trickle down amount from the bailed out banks. The banks still get their money but via a different pathway that reduces the burden across the spectrum. This is win, win for everyone involved and it does not screw the guy at the bottom.