In
2006, the Treasury
Department under President Bush studied the Bush tax cuts and found their
economic impact negligible,
certainly not sufficient to extend them past their 2010 expiration date. The report concluded that the "Bush
tax cuts" should expire on schedule in 2010, since a permanent tax reduction
"would lead to an unsustainable accumulation of debt." This conclusion has been supported time
and again by other non-partisan studies, and of course attacked by Republicans
and their allies.
Infrastructure Spending Worth More Than Tax
Cuts
Even
before the CRS report was released in September, The
Economist had a report about austerity and spending in its August 17
issue that referred to an earlier CRS
report that had reached the same conclusion but was not suppressed. According to The Economist:
The problem with infrastructure spending is
the intangibility of its effects. Since projects take time and money to
construct, the argument for infrastructure spending having a positive impact on
productivity in the short-term is difficult to quantify, though it seems to be able to
generate a short- to medium-run boost, in part by raising prospects for
near-term business investment. In the longer term however, infrastructure
investment can deliver positive returns to productivity, says a study by
the Congressional
Research Service , and this is a generally agreed consensus among
academics, economists, and policymakers alike.
Princeton
Economics Professor Paul Krugman explained in his New York Times column November 1, that one reason he didn't write about the
CRS report when it appeared in September because "it was basically old
news". Nobody has ever been able
to find clear evidence of a link between high-end tax cuts and growth."
By
November 8, the Nobel-prize winning economist was urging President Obama to
resist Republican pressure to make an economic deal in the next few weeks:
Why? Because Republicans are trying, for the
third time since he took office, to use economic blackmail to achieve a goal
they lack the votes to achieve through the normal legislative process. In
particular, they want to extend the Bush tax cuts for the wealthy, even though
the nation can't afford to make those tax cuts permanent and the public
believes that taxes on the rich should go up -- and they're threatening to block
any deal on anything else unless they get their way. So they are, in effect,
threatening to tank the economy unless their demands are met.
Congressman Seeks Answers to Political
Suppression
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