I seem to find myself in the position of answering my own question. In my prior post I had questioned how much more economic benefit we would get from disbursing more benefits to the middle class (including unemployed middle class) than we would get from extending tax cuts. I had heard the republicans reference a CBO report that extending the Bush Tax Cuts, including the rich, would positively boost the economy.
I found the original report (below) and apparently they were right. However, the part they left out is that of all the options to stimulate the economy, extending the tax cuts the absolute WORST. It turns out that increasing unemployment benefits is the best option, to the tune of 200%-300% better!
Also, below is a blog post in which it was reported that in testimony before congress last fall, CBO Director Doug Elmendorf testified that “...CBO’s research and modeling finds that making the tax cuts permanent would REDUCE the nation’s output and income by almost 1.4 percent by 2020” (quoted from Jay Bookman post 9/29/2010 on ajc.com).
I only wish that democrats would do a better job of making these points.
CBO Analysis: Policies for Increasing Economic Growth and
Employment in the Short Term
February 23, 2010
Effects of making Tax Cuts permanent.