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Wednesday, October 18, 2006
Reporting Deficit
The Washington Post ran a good article on the tax cuts and the deficit yesterday- lots of interesting quotes from credible folks with different opinions. Here's a great quote on the forces driving the lower deficit:
"The simplest way to think about it, I think, is we know we have growing income inequality, especially at the top," said Isabel V. Sawhill, a Brookings Institution economist who worked for the Clinton administration. "The very rich are pulling away from the ordinary rich and the middle class. Those very rich people pay higher tax rates. When the distribution of income shifts upward, as it has in recent years, you get a revenue kicker from that."
Now, compare that article with one Reuters ran on Monday, in which most quotes come from economists housed at businesses or law firms, and the only option for reducing the deficit that's really presented is to cut spending. Further, the assertion that the Bush tax cuts lowered the deficit goes unchallenged, and the title -"U.S. Budget Deficit Could Shrink Further in 2007"- is highly implausible, given that the Congressional Budget Office predicts the deficit will increase in 2007.
The Reuters article is irresponsible; take a look at the Washington Post article for a serious discussion of the relationship between the Bush tax cuts and the deficit.
Posted by Matt Lewis
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