Nell Henderson Dives into the Tank for the Bush Administration
Outsourced to Tom Bozzo:
Marginal Utility: Fair and Balanced Lying at the WaPo: Via the Lovely and Talented Shakes comes a piece of tripe in the Washington Post.... [Nell] Henderson...
The Treasury report did not openly address the much-debated contention of many conservative analysts that the tax cuts will boost economic growth so much over time that the resulting increase in taxes paid will offset much or all of the initial loss in government revenue -- that tax cuts can essentially pay for themselves.
The report acknowledged the debate delicately, saying "the issue of how, or even if, these policies need to be financed remains a source of discussion among economists."
No. Simply no. There is not an economist in his or her right mind--not Mankiw, who engineered them, not DeLong, and certainly not Jason Furman--who would question whether the extensions "need to be financed"--save for those who agree that they should not happen at all.
Nell Henderson could have done the math: the Treasury report says that in the favorable case it expects $200 billion per year worth of tax cuts financed by spending reductions to boost GDP by 0.9%. 0.9% of $13
billion trillion is $120 billion. 25%--the marginal federal revenue share--of $120 billion is $30 billion. The Treasury's most favorable scenario is that $200 billion of tax cuts needs to be financed by $170 billion of spending cuts.
But that would require that Nell Henderson think that informing her readers have a higher priority than not being yelled out by staffers from White House Media Affairs, wouldn't it?