Read this: if the Bush tax cuts live, the economy, incomes die

Source: blog.reidreport.com - Wednesday, November 10, 2010
Making the Bush tax cuts permanent will kill the U.S. economy. Film at 11. Per Ezra Klein today: CBO Director Doug Elmendorf testified before the Senate Budget Committee today and dropped something of a bombshell. Extending the Bush tax cuts, he said, will “probably reduce income relative to what would otherwise occur in 2020.” The reason is simple: Debt. Elmendorf doesn’t deny that tax cuts stimulate the economy. But they don’t stimulate it that much, he says, and over the long run, the net economic growth from the tax cuts will be quite small. The net deficit impact won’t be. “Lower tax revenues increase budget deficits and thereby government borrowing,” Elmendorf said, “which crowds out investment, while lower tax rates increase people’s saving and work effort; the net effect on economic activity depends on the balance of those forces.” True to form, he brought a graph: In short, the less you extend the Bush tax cuts, the less damage you do to the economy. This DailyKos diarist takes it from there: To be sure, the damage George W. Bush and his tax cuts did to the American economy is staggering. His was the worst eight-year economic record of any modern president. Poverty is at its worst in sixteen years. As the Census confirmed yesterday, by 2007 the U.S. reached levels of income inequality not since 1929. And as tax expert David Cay Johnston recently documented, “total income was $2.74 trillion less during the eight Bush years t