Doug Elmendorf, director of the Congressional Budget Office, testified that extending the Bush tax cuts will end up hurting the economy before the Senate Budget Committee today. Elmendorf, who referred to this chart, admitted that extending the tax cuts would stimulate the economy in the short-term. But the net economic growth would be small. Net debt, on the other hand, would be considerable because, "lower tax revenues increase budget deficits and thereby government borrowing, which crowds out investment." Ezra Klein explains Elmendorf's findings succinctly: "The less you extend the tax cuts, the less damage you do to the economy." If you look into deep into Elmendorf's soul, we're sure you'll find the bleeding heart of a tax-cut hating socialist. But since both parties merely differ on how long to extend the tax cuts and which cuts to extend, it's hard to tell if he's a Democrat or Republican.
Photo: Doug Elmendorf via Washington Post