PRES. OBAMA HAS TO SNAP OUT OF IT...

(h/t Atrios)

With unemployment at 10%, he decides to give businesses a tax break by speeding up depreciation. There's one problem with this as a means to increase employment: IT DOESN'T WORK!

From Bloomberg:

Economists have challenged its efficacy as a stimulus measure. A study by Federal Reserve Board economists Darryl Cohen and Jason Cummins found the 2002 subsidy, which provided a 30 percent write-off in the year equipment was purchased, had “a very limited impact” on investment spending.

A subsequent study by Treasury Department economist Matthew Knittel found the bonus depreciation incentives from 2002 to 2004 were largely ineffective. Companies claimed the break for only about 60 percent of their eligible investments, he said. That may be because they weren’t in a position to benefit because of losses and therefore had no tax to reduce with the deductions, he wrote.

“There is little to show that it or other tax cuts work to stimulate job creation,” said Linda Beale, a law professor and director of graduate studies at Wayne State University in Detroit. “This expensing provision most likely serves to provide bigger dividend payouts to shareholders and even higher compensation to corporate executives.”