Obama’s reverse stimulus on its way

November 27, 2009

Jed Graham of IBD highlights the coming fiscal drag in a pretty picture:

0112509ibd

Me: What would that mean for GDP growth? A pre-financial crisis analysis by Goldman Sachs predicts, for instance, found that getting rid of all the Bush tax cuts at the end of 2010 would cause a 3 percentage point drop in the economy in 1Q 2011.  In any event, anti-growth fiscal policy is one more reason to believe in the dreary New Normal

7 comments

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/

so reversing the Bush tax cuts for the wealthy would be reverse stimulus, but increasing health care spending on working class folks would not be stimulative? You appear highly selective in your “stimulative” definitions…

Posted by Chi Democrat | Report as abusive

[...] How are we ever going to get out of this mess? [...]

I hope all the folks who voted for “change” are happy. They’re not getting their Obamabucks as they thought. Hmm.

Posted by Frank | Report as abusive

It is easy to define the options regarding how to get out of the mess: cut spending in the major categories: defense, social security, medicare (not this year or next amidst a massive demand contraction but soon thereafter) or raise taxes. What is challenging is getting enough folks to agree on which of those options to choose. What do you want to do?

Posted by Chi Democrat | Report as abusive

Obama gonna pay my gas and mortgage!

Posted by ahem | Report as abusive

Chi Democrat seems to not understand the health bill will start collecting taxes in 2010, but not start providing any benefits until 2014. The net of this is fours years of increased taxes that would slow the economy.Rick

Posted by Rick Caird | Report as abusive

Republicans aren’t satisfied with having the responsibility of creating the largest deficits in American history, creating the two largest land busts in American history, denying that global warming exists, coveting religious charlatans, continuing to believe in trickle down economics, believing that Americans own all the natural resources in the world and will send troops to prove it, allow corporations to control government, allow energy companies to use undisclosed chemicals in fracturing, Sarah Palin and the list goes on and on.When humans were developing tools to advance themselves in an agrarian society republican ideas were making useful contributions to society. That time is nearly a century behind us and now that man has developed the ability to create synthetics in the fields of chemistry, finance and one could argue government officials, it is time for humans to more actively engage our cognitive abilities to enrich our lives and the lives of our children. We must throw away the preditory behavior that advanced an agrarian society and move toward adopting a more responsible state of governance that reflects the power of our intellect.

Posted by csodak | Report as abusive

Rick,Which is presumably why the chart cuts off at 2013 instead of showing the out years when the net impact of the reform will be neutral.

Posted by Chi Democrat | Report as abusive