bush's economy

Reckless tax cuts and wild spending creating problem for Treasury

The credit card congress strikes again. Hacking at tax revenue for the richest Americans and spend-now-think-later policies are putting the pinch on Treasury who has to find a way to make it all work. The Bush-era GOP magic economic formula sounds a lot like Reagan era voodoo economics except Reagan didn't have the black hole of spending for Iraq to contend with and even so, climbing out of that hole was hard enough.

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."

But the Treasury's view reflects "a recognition the federal government has to finance the tax relief" to avoid a rise in government debt, Robert Carroll, deputy assistant secretary for tax analysis, said in an interview.

The report stressed that the economic effects of extending the tax cuts "depend crucially on whether they are financed by lower spending or higher taxes in the future."

(Americablog)