The stimulus package is a great idea, assuming you rip out the non infrastructure 'porkulus'.

The fact is, when unemployment rises ... labor is cheap. When unemployment is low, labor is costly. Now is the time for the Government to take advantage of that cheap labor.

The government can get a good deal on good talent right now as unemployment rises. It's a great time to be investing in infrastructure. Investing in infrastructure when everyone has jobs and hiring them is super costly is just .. dumb.

What people don't understand or appreciate is that Government is a business. It's not even a monopoly really, though the switching costs (moving to another country) are admittedly pretty high.

Businesses, if they can swing it, should invest during down cycles, it's a smart, long term approach.

I'm pretty familiar with this as a Vancouverite. We had major cost overruns on the Olympics because the government was hiring hard to build it out during very low unemployment. This, of course, gets very expensive.

Tax cuts are not the way to go. People who get tax cuts are just going to save that money, though targeted tax credits will probably work fairly well (eg, in Canada we have a renovation tax credit of 10% of your renovations can be clawed back on your taxes. Pretty smart).