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I know two businesses burnt in this manner. These are the business I spoke of spending money to find. What I was trying to get at is the money would most likely not go to such business and will instead go to failing large industry companies like GM, AIG, etc.

If we spent the money looking for the type of business you point out then the governement could step in with this cash and offer a very low term loan sort of in the spirit of the FAFSA loan system for education. This would help to recover them from bankruptcy or keep them with legit loans they can acctually use for real developement instead of padding a multi-billions dollar company that wasn’t working so well in the first place.

In other words I agree and was aiming in the same direction you were, I simply didnt make that aspect detailed enough.

and the last few words were a frusterated rant

@Hal, the following quote from Rahm Emmanuel is interesting.
“Never let a serious crisis go to waste. What I mean by that is it’s an opportunity to do things you couldn’t do before.”
This is from the WSJ article that is linked in this opinion. BTW, I read the article that you referenced and it is an awesome piece of analysis and unfortunately it makes sense.

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Read this editorial, it’s the track were on: TURNING JAPANESE – THE AUDACITY OF REALITY.

While I agree that the percentage of money you point-out would be better spent elsewhere there seems to be a huge diconnect between giving “thoughs who can create jobs” and willingness to spend it on actually making jobs an not just hording it.

The problem is if there is a lack of work and money to pay bonuses and give raises spending slows, when spending slows bonuses get cut and so does the work force because the company paying them isnt making as much money as it was. Giving the buisness’s that require people spending money to function money to hire more people wont do anything of the sort because they would be hiring people to meet a demand that doesnt exsist.

So they simply wont hire and will store and invest the cash. They will use this padding to the best of thier abilities to weather the down-turn and hope for a brighter day where their currently established business model will once again be gainful. Then they will reopen thier HR gates and say “see I told you if you just gave the money to those who merit it everything will pull-through eventually”. If they dont pull through they go into bankruptcy and get more money from the government to soften this blow aswell, with the chance of doing it again when that money runs out.

Thus the old “why pay someone who doesnt work welfare? Then they have no reason to work hard to get ahead” applies here aswell. Why would they try to change their failed business model or close-down and work to create a new one when they can just get enough money to weather the storm instead of creating a new foundation from their experiences that holds-up on it’s own?

Maybe the money should go into research to find business models that are currently seeing an up-turn in their industry and looking to expand. Then spend the money left to support these businesses in a variety of ways such as grants for R&D, government loans similar to something like FAFSA for commercial expansion, and prosecuiting all the white collar criminals in wall street and Washington DC that “gamed” the system into disrepair.