Slouching Towards Oblivion

Saturday, December 05, 2009

My Man, Mr Bartlett

Back in about 03 - 04, CBO told us the Bush Tax Cuts were providing about 59 cents of stimulus for every lost revenue dollar; and that traditionally, direct stimulus in the form of block grants to state governments had provided around $1.19 for every dollar spent.

Bruce Bartlett confirms what everybody except a certain bunch of Republicans already know.
To wit:
The CBO also looked at the stimulative effect of various parts of the stimulus package. It found that purchases of goods and services by the federal government--such as for public works--had the largest bang for the buck, raising GDP by $2.50 for each $1 spent. Transfer payments had a lesser impact, but were still significantly more stimulative than tax cuts. Moreover, tax cuts of the sort favored by Republicans have the least impact. According to the CBO, tax cuts for low-income individuals raise GDP by as much as $1.70 for every $1 of revenue loss, while those for the rich and for corporations raised GDP by at most 50 cents for every $1 of revenue loss.

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