Growth rates for gravitational instabilities in a thick disk of gas and stars are determined for a turbulent gas that dissipates on the local crossing time. The scale heights are derived from vertical equilibrium. The accuracy of the usual thickness correction, (1 + kH)-1, is better than 6% in the growth rate when compared to exact integrations for the gravitational acceleration in the disk. Gas dissipation extends the instability to small scales, removing the minimum Jeans length. This makes infinitesimally thin disks unstable for all Toomre-Q values and reasonably thick disks stable at high Q primarily because of thickness effects. The conventional gas+star threshold, Q tot, increases from 1 without dissipation to 2 or 3 when dissipation has a rate equal to the crossing rate over a perturbation scale. Observations of Q tot ∼ 2-3 and the presence of supersonic turbulence suggest that disks are unstable over a wide range of scales. Such instabilities drive spiral structure if there is shear and clumpy structure if shear is weak; they may dominate the generation of turbulence. Feedback regulation of Q tot is complex because the stellar component does not cool; the range of spiral strengths from multiple arm to flocculent galaxies suggests that feedback is weak. Gravitational instabilities may have a connection to star formation even when the star formation rate scales directly with the molecular mass because the instabilities return dispersed gas to molecular clouds and complete the cycle of cloud formation and destruction. The mass flow to dense clouds by instabilities can be 10 times larger than the star formation rate. © 2011. The American Astronomical Society. All rights reserved.