Both sides are gearing up for what will be an important discussion near the end of this year, which is the decision to extend or not extend the Bush-era tax cuts. If they aren't extended, the rates go back up to what they were in the Clinton-era. (Not a bad time, economically, as I recall.)
The argument from the GOP is that you don't want to raise taxes during a harsh economic downturn. That may or may not be true, but if you make all of those cuts permanent, the deficit they said they are so concerned about will balloon by a few trillion dollars.
Even Alan Greenspan, who loves tax cuts, said it would be disastrous to do so without paying for them upfront, something the Bush tax cuts never did.
They are also trying to make the argument that if they aren't extended it would be a tax hike by the Democrats, which is a ridiculous argument.
The Bush tax cuts -- pushed by a Republican Congress -- were DESIGNED to expire at the end of this year. The GOP is the reason the tax cuts are about to expire. And every independent analysts who have chimed in -- and some Bush-era financial folks -- have said that tax cuts do not pay for themselves and are one of the least effective ways to stimulate the economy. Tax cuts generate about $0.32 for every dollar, while Food Stamps get $1.71 for every dollar and unemployment benefits roughly $1.60.
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