Monday, November 01, 2010

Extending The Bush Tax Cuts Forever: Fiscal Insanity

The Congressional Research Service posted a report examining what affect the looming expiration of the Bush tax cuts would have on the economy. According to The Daily Dish, extending these breaks forever would be fiscally insane.

The reports

A recent study by Alan Auerbach and William Gale projects that tax revenue would have to be permanently increased by 4.6% of GDP just to keep the debt-to-GDP ratio at the current level over the next 75 years under the current law scenario (i.e., allow the Bush tax cuts to expire). They refer to this as a fiscal gap of 4.6%.

If the Bush tax cuts were permanently extended the estimated fiscal gap rises to 7.2%. They project that by 2085, debt as a percentage of GDP would approach 600% under the current law scenario and 900% if the Bush tax cuts are extended—extraordinary levels that are unprecedented for the U.S.

Read more here

Blog Archive