As economic problems pile up, Obama looks at tax cut

The Obama administration and Democrats in Congress figured that there $750 billion stimulus program would add three million jobs to the economy. That should be enough to pull the US out of a recession. It would also rebuild much of America's infrastructure.

It has stated to dawn on the architects of a recover package that the plan will not do enough for the economy short-term. The destruction of jobs and lack of access to credit are getting worse by the say.

What's the answer? Combine $350 million in business and consumer tax cuts with the plan to increase jobs. So, according to The Wall Street Journal, "The size of the proposed tax cuts -- which would account for about 40% of a stimulus package that could reach $775 billion over two years -- is greater than many on both sides of the aisle in Congress had anticipated."

Tax cuts would probably get money into the economy faster than a jobs creation program, but what will people and companies do with the money? It may not make it into the economy in the form of new spending.

The Bush tax rebate happened before the recession started to bite. Many people were willing to spend the money the government sent them. But, in much less than a year, sentiment has changed tremendously. Business and individuals are showing that any money they bring in goes to pay debt or increase savings. It is not clear how that helps the economy quickly. As a matter of fact, given the overall reluctance to spend, it may not help the economy at all.

Douglas A. McIntyre is an editor at 247wallst.com.