Tax breaks under consideration, says the Washington Post. (via memeorandum)

Among the options are a temporary payroll tax holiday and a permanent extension of the research and development tax credit… Permanently extending the research credit would cost roughly $100 billion over the next decade, tax experts said. And depending on its form and duration, a payroll tax holiday could let businesses keep more than $300 billion they would otherwise owe the Treasury.

Well, well. It’s not clear whether the better news is that Larry Summers may be able to see lightning and hear thunder after all, or that the WaPo, for the first time in my experience, phrases the matter as “…let businesses keep…” the money rather than “tax cost”. Of course they did one of each, but let it go. They’re new at it, after all.

Tyler Cohen’s commenters are skeptical, as well they might be. Yglesias is predictable: Spend more money! (Where the money is to come from not specified, as usual.) Allahpundit snarks beautifully. Ace endorses the idea.

All of them miss the point. Yes, a tax cut would very likely stimulate the economy a bit, though since it will also add to the deficit the impact will be minimal.

If you want to stimulate the economy without adding to debt, there’s an easy but unthinkable way: not a tax holiday, but a regulation holiday. No Federal Paperwork for One Year! would get business rolling at a clip you wouldn’t believe, and just not having to pay per diem to the hordes of “inspectors” and other busybodies from the alphabet agencies would be a small but significant saving in the budget. If we could lay them off, like private businesses do when work is slack, the saving would be enormous.

As a bonus, we might actually find out what those people do all day. If, as most of us suspect, it varies between “nothing” and “being as obstructive as possible”, we might see our way clear to doing without them on a longer-term basis.

Probability: Epsilon.