Our baseline – which assumes no change in current law — suggests that among other factors, the slowing economy will boost the deficit to $219 billion, or 1.5 percent of GDP, this year. If Congress provides the additional funding for operations in Iraq and Afghanistan requested by the Administration, the deficit would rise to $250 billion. And if a fiscal stimulus package is enacted, the 2008 deficit could be substantially higher – and at least from a short-term stimulus perspective, that could be desirable. The fiscal 2007 deficit was $163 billion, or 1.2% of GDP - Orzag guy from the CBO
The spice must flow ... gulp.
DEMS DO REPUBLICAN-LITE STIMULUS
If you really believe that we are headed toward a recession, the Dem-agreed package does nothing but shift the brunt of it to the term of the next President.
The Dems have validated the Republican-inspired model that tax-cuts are an appropriate cyclical tool. (Gee thanks, Larry Summers). No unemployment insurance special contingency is included (it really is cut-tax and spend ...).
They broke the principle of "targeted", by bowing to GOP pressure on accelerated depreciation for everyone.
How meaningful "the package" is to middle classes is also debatable, considering a doubling of "expenses" eligible for deduction for small business owners, who are probably not "middle class". (do the math: $125K deduction increase @ 30% tax rate = $37,500 tax cut for small business owners, not $600 ...).
Last, there is absolutely no direct investment in the package. Instead of passing on a strengthened public infrastructure as a legacy, the next generation will get ... the bill.
Cheers! Eat, drink, and be merry - it's your Party!
