An economic stimulus idea. What do you think?

A penalty free one time withdrawal allowance from your personal retirement plan be it a 401k or IRA. The amount would be limited to say, 10% or $10,000 whichever is smaller of the employee portion of the contributions to prevent those that don’t really need it from floating themselves an interest-free loan.
The payback period would be extended for a period of time before it would considered a taxable distribution to allow those that can, pay it back without having to pay taxes on it.
This would allow hardworking people to access they’re own funds to get out of whatever mess they are currently in due to the "credit crunch" and housing problems which are currently affectng the economy.
Any thoughts… Pros/Cons?
Thank you..Good responses so far. for me it would make it easier to replace my gas-guzzling SUV…
Andy -What you say is true, however there are many being penalized now just to stay afloat due to our current state. Besides penalty-free distributions are currently allowed via SEPPs. This would just be another option….

Hmmm….I think this is a well-thought out idea that would work in the real world.

Congratulations on being the first person this year on YA to have an idea actually worthy of consideration. You, sir, are a gentleman and a scholar.