CBO Chief Says Tax Cut Extension Would Hurt Economy

[sabra]

Source: Bloomberg

A permanent extension of Bush-era tax cuts would provide a temporary boost to the U.S. economy and then become a drag on growth by pushing up interest rates, the head of the nonpartisan Congressional Budget Office said.

Douglas Elmendorf said extending all of the breaks due to expire at year’s end would increase demand in the next few years by putting more money in consumers’ pockets.

Over the long term, he said, the tax cuts would hurt the economy because the government would have to borrow so much money to finance them that it would begin competing with private companies seeking loans. That, in turn, would drive up interest rates, Elmendorf said.

“The problem is that if those tax cuts are not accompanied by other changes in the government budget and are simply funded through borrowing,” the borrowing “crowds out other private investment in productive capital -- in the sorts of equipment, the computers, the machinery, the buildings -- that are the source of long-term economy growth,” Elmendorf told the Senate Budget Committee today.

“That connection is less visible, and I think thus less apparent in most people’s intuition, but it is no less important for being not-so-visible,” he said.

Read more: http://www.bloomberg.com/news/2010-09-28/budget-scorekeeper-says-tax-cut-extension-would-hurt-economy.html

[COLGATE4]

1. Well, who the hell is HE to say anything - he's only the head of

the non-partisan CBO! Look to hear the RW echo chamber downplay furiously down play this as somehow 'partisan politics'.

[Igel]

6. This actually sounds familiar.

The stimulus, the CBO said, would provide a short-term boost to the economy but then a reduction in the annual growth rate from increased interest payments and interest rates.

Same for the tax cut extension.

For the tax cut extension, we oppose them and hear only the downside; they approve them and hear only the upside.

For the stimulus, we (now) hear only the upside and they hear only the downside.

[Enthusiast]

2. The Republicans quote the CBO

when it suits them and ignores it when it goes against their agenda.

[johnnyplankton]

3. Why Oh Why haven't the Democrats brought this to a vote?

The outcome wouldn't even matter, just let the American people see who is for, and who is against keeping the Tax Cuts for the top 2%. Throw in the CBO reports and even morons might understand (though Tea Partiers are a particularly fact-resistant strain of morons.

I know the arguments, but they all suck. Let's stop playing politics and start standing up for what you allegedly believe in.

DON'T FORGET TO VOTE!!!!!!!!!!!!!!!!!!!!!!!

[grahamhgreen]

4. They are either idiots or

working solely for the monied interests...

[niceypoo]

5. the government would have to borrow so much money to finance them that it would begin competing with

...big business for loans?

The MSM will ignore this. The GOP are hell bent on collapsing the economy.

[T. Count]

7. So is this for all the tax cuts or just those for the rich? nt