Pages

Jump to bottom

1 comment

1 watching you tiny alien kittens are  Mon, Nov 26, 2012 10:10:55am

If Congress does nothing and allows all of the "fiscal tightening" measures to go into effect here is what the CBO says will result...

According to CBO’s projections, if all of that fiscal tightening occurs, real (inflation-adjusted) gross domestic product (GDP) will drop by 0.5 percent in 2013 (as measured by the change from the fourth quarter of 2012 to the fourth quarter of 2013)—reflecting a decline in the first half of the year and renewed growth at a modest pace later in the year. That contraction of the economy will cause employment to decline and the unemployment rate to rise to 9.1 percent in the fourth quarter of 2013.
[Link: www.cbo.gov...]

So yes, recession and higher unemployment. I'm still looking at the full PDF version trying to figure out how they conclude that the GDP would begin to rebound towards positive growth again within the year. That seems overly optimistic to me considering how slow growth already is. Still they conclude that under this scenario it would take until 2018 for unemployment to drop back to 5.5%.

However if Obama were to get what he originally said he wanted...

Extending all expiring tax provisions other than the cut in the payroll tax and indexing the AMT for inflation—except for allowing the expiration of lower tax rates on income above $250,000 for couples and $200,000 for single taxpayers—would boost real GDP by about 1¼ percent by the end of 2013. That effect is nearly as large as the effect of making all of those changes in law and extending the lower tax rates on higher incomes as well (which CBO estimates to be a little less than 1½ percent, as noted above), primarily because the budgetary impact would be nearly as large (and secondarily because the extension of lower tax rates on higher incomes would have a relatively small effect on output per dollar of budgetary cost).

Note that if you read that CBO report carefully it is actually suggesting two scenarios that achieve the highest growth of the GDP. The first is a two year extension of the Bush tax cuts, except for the top bracket, and a like delay of any fiscal tightening measures resulting in 2.7% growth. The second is the same but also extends the payroll tax cut and emergency unemployment benefits resulting in 3.4% growth.

Also note that they state that allowing taxes to rise on the top bracket would only knock less than .025 off of the maximum possible GDP growth. So much for the "Hurting the Job Creators" mantra, the numbers simply don't back that claim up.

However as far as the budget is concerned allowing the top bracket cut to expire does almost as much good by itself as all the other proposed fiscal measures do when combined. How is that possible? It is because the Government gets that money without any corresponding increased costs to itself. No large surge of unemployment benefits, no reduced tax base due to recession, no increase in welfare and medical benefits to the poor, that's how.


This page has been archived.
Comments are closed.

Jump to top

Create a PageThis is the LGF Pages posting bookmarklet. To use it, drag this button to your browser's bookmark bar, and title it 'LGF Pages' (or whatever you like). Then browse to a site you want to post, select some text on the page to use for a quote, click the bookmarklet, and the Pages posting window will appear with the title, text, and any embedded video or audio files already filled in, ready to go.
Or... you can just click this button to open the Pages posting window right away.
Last updated: 2016-01-01 10:29 am PST
LGF User's Guide RSS Feeds

Help support Little Green Footballs!

Subscribe now for ad-free access!Register and sign in to a free LGF account before subscribing, and your ad-free access will be automatically enabled.

Recent PagesClick to refresh
Should It Be Legal to Resell E-Books, Software, and Other Digital Goods? "If you're going to start reselling digital goods, who would be the fool who buys the original book?" asks Martijn David, the secretary general of the Dutch Publishers' Association. "A second-hand car is not new. A second-hand book is ...
Thanos
1 hour, 39 minutes ago
Views: 69 • Comments: 1 • Rating: 0
Tweets: 2 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Swiss Mark Opening of World’s Longest and Deepest Rail Tunnel Switzerland will celebrate an engineering marvel 20 years in the works on Wednesday: the debut of the world's longest and deepest railroad tunnel. The new tunnel through the Alps is 35.5 miles long, exceeding by 2 miles the current ...
Thanos
5 hours, 39 minutes ago
Views: 109 • Comments: 0 • Rating: 0
Tweets: 2 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Dr Heimlich Saves Choking Woman With Manoeuvre He Invented The 96-year-old American inventor of the Heimlich manoeuvre has used the technique himself to save a choking woman at his retirement home. Dr Henry Heimlich said he had demonstrated the technique many times but never used it in an ...
Thanos
21 hours, 17 minutes ago
Views: 247 • Comments: 0 • Rating: 0
Tweets: 4 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Push for Encryption Is Losing Steam in Congress, Despite Apple ShowdownI've never been in favor of a back door, however if there's an appropriately issued warrant and the phone manufacturer retrieves the data and unencrypts it without handing the tools to the police, I do not have heartburn with that. ...
Thanos
1 day, 1 hour ago
Views: 269 • Comments: 0 • Rating: 1
Tweets: 2 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Especially for the Indy Minded, Welcome to the Election From Hell The following author really captured what I sense, what I feel, what makes me despair of this election this year. My dear friends online, I confess I am far too independent for the comfort of many around me. This ...
Great White Snark
1 day, 18 hours ago
Views: 616 • Comments: 2 • Rating: 2
Tweets: 2 • Share to Facebook
Shares: 1
Likes: 2
Comments: 7
: 10
GOP Budget Bill Would Kill Net Neutrality and FCC’s Set-Top Box Plan The proposal is the latest of many attempts to gut the FCC's authority, though it's unusual in that it takes aim at two of FCC Chairman Tom Wheeler's signature projects while also cutting the agency's budget. The plan is ...
Thanos
2 days, 1 hour ago
Views: 603 • Comments: 0 • Rating: 1
Tweets: 4 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Landmark Ruling Halts Unconstitutional Taxpayer Funding of NJ Yeshiva and Seminary In a groundbreaking victory against government sponsorship of religion, a New Jersey appellate court ruled that the administration of Gov. Chris Christie violated the New Jersey Constitution when it awarded more than $11 million to two religious institutions of ...
Thanos
2 days, 3 hours ago
Views: 482 • Comments: 0 • Rating: 1
Tweets: 3 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Dashcam Catches Moment Riverside Officers Save Man From Deadly Leap Into Missouri River K-9 Officer Andrew Marr with the Riverside Police Department comforts a man that he and officers Eric Strong and Jeremy McKown had just prevented from jumping from the Interstate 635 bridge into the Missouri River on Monday night. Courtesy ...
Thanos
2 days, 4 hours ago
Views: 621 • Comments: 1 • Rating: 1
Tweets: 1 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0
Obama: World Leaders Are ‘Rattled’ by Trump — and for Good Reason President Obama said Thursday that world leaders are “rattled” by presumptive Republican presidential nominee Donald Trump and that he doesn’t blame them for being worried about the real estate mogul's political rise. “They are not sure how seriously to ...
Thanos
2 days, 5 hours ago
Views: 713 • Comments: 0 • Rating: 3
Tweets: 14 • Share to Facebook
Shares: 1
Likes: 0
Comments: 0
: 1
OpenBike Charges Phones, Lights, and Connects Your Bike to the Cloud OpenBike cofounder Randall Jacobs says that lights, phone mounts, cloud communications, and more, should be standard on bicycles today, not a hodgepodge of add-on equipment. His company, OpenBike, launched at the Highway 1 hardware accelerator earlier this month, has ...
Thanos
2 days, 4 hours ago
Views: 578 • Comments: 0 • Rating: 1
Tweets: 2 • Share to Facebook
Shares: 0
Likes: 0
Comments: 0
: 0