Tuesday, September 21, 2010

The ins and the outs

must be the same for there to be a balanced budget. WaPo with a story noting that doing nothing--which means the tax code will return to 2001 levels would come close to balancing the budget by 2015. Extending all the tax cuts (enacted via reconciliation--that is why they go away after 10 years) will add around $4 Trillion to the deficit over 10 years. That is around 4 times larger that the ARRA and the TARP combined....PPACA reduces the deficit per CBO....even the outlays alone in PPACA with no spending cuts or tax increases are around $1 Trillion over 10.

The Senate Dems have a plan to extend some of the cuts, adding about $2 Trillion to the deficit over 10 years.

Neither party at this point has shown they mean it when it comes to fiscal responsibility; the Republicans are more culpable than the Dems in my book because they talk about 'fiscal responsibility' so much (and only talk).

Perhaps extend the rates for 1 year given the recession....CBO says it will stimulate the economy a bit, but that effect will be eroded due to borrowing by mid-decade. Then, lets try the tax code the last time we had a balanced budget and see what happens.

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