Unless I'm missing something, I have to take exception to Josh Marshall's take on Senate Republicans' promotion of a payroll tax holiday, which would essentially relieve employees from their contribution to Medicare and Social Security and employers from those and unemployment insurance. This would net employees an instant 8.3% raise, according to James Galbraith, in his piece, "Stimulus is For Suckers...", which neating identifies the recovery efforts that give the taxpayers the most bang for the buck. (As an ex-Small Business Owner, I should know what the break is for the employer, but it has gone into the black hole where most of calculus is hiding.) 

Galbraith produces a really compelling chart that identifies the estimated return on investment for each dollar "spent" by the government/taxpayer. [Since I was unable to insert the image of the chart, I highly recommend riding the link and then popping over to the second page of the article to see the chart.]

According to Galbraith, a Payroll Tax Holiday would return $1.29 per $1, placing it 5th among the 13th options he charts. The four options that outperform the Payroll Tax holiday (by return per dollar "invested"?

1. Food Stamps ($1.73)
2. Extended Unemployment Benefits ($1.64)
3. Infrastructure ($1.59)
4. Aid to States ($1.36)

One more option has a decent return:

1. Refundable Tax Rebate

The next two options are basically break-even:

1. Across the board tax cut ($1.03)
2. Non-refundable tax rebate ($1.02)

And he wraps up with five frequently mentioned options that don't perform nearly as well:

1. Extending the AMT patch ($.48)
2. Making diveident and capital gains tax cuts permanent ($.37)
3. Corporate tax cut ($.30)
4. Making Bush income tax cuts permanent ($.29)
5. Accelerated depreciation ($.27)

One problem I have with article is that Galbraith's five recommendations don't exactly line up with the items he charts:

1. "First, we must fix housing. We need, as in the 1930s, a Home Owners' Loan Corporation to restructure failed mortgages on sustainable terms."
2. "Second, we must backstop state and local governments with federal funds." (Aid to states, #4 on the chart). 
3. "Third, we should support the incomes of the elderly, whose nest eggs have been hit hard by the stock market collapse... The best way is to increase Social Security benefits." (By as much as 30%).
4. "Fourth, we should cut taxes on working Americans." (Here's where he recommends the Payroll Tax Holiday approach, #5 on the chart).
5. "Finally, we must change how we produce energy, how we consume it, and above all how much greenhouse gas we emit." (No doubt this relates to Infrastructure on the chart, #3). 

Despite what I see hear as a bit of a disconnect--why doesn't he recommend right out of the gate either #1 or #2 from the chart, the apparent, no-brainer, low hanging fruit of food stamps and extended unemployment benefits???--I highly recommend this quick-read examination of what should be done for what ails the economy.

Back to Josh Marshall's piece, then, "That's Original", currently on the front page, again, unless I'm, in Bush-speak, "misunconnecting" the dots properly, the Republican Senate proposal is actually the same as Galbraith's recommendation #4, which has the 5th highest ROI ($1.29) on his chart.

The disconnect between Marshall's response and mine may lie here: I assume the Republicans mean to continue to fund Social Security and Medicare from the Treasury for the duration of the holiday, as Galbraith suggested. I make this assumption because the topic, as I understand it, is being discussed in the context of how to allocate government investments in economic recovery. Perhaps this is where I'm wrong and Josh is right?