Ex-Obama regime Office of Management and Budget director Peter Orszag says extend Bush tax cuts for two years

budgetdirectorpeterorszagMaybe this is why Peter Orszag left the Obama regime? In a piece by Orszag written in the New York Times, he calls for an extension of the Bush tax cuts for two years. Even a leftist like Orszag is forced to admit in his column that increasing taxes, in this pathetic economy would “crimp” consumer spending and depress current weak demand for goods and services:

Higher taxes now would crimp consumer spending, further depressing the already inadequate demand for what firms are capable of producing at full tilt. And since financial markets don’t seem at the moment to view the budget deficit as a problem — take a look at the remarkably low 10-year Treasury bond yield — there is little reason not to extend the tax cuts temporarily.

A benign bond market, however, is a luxury we won’t enjoy forever if we fail to tackle our long-term fiscal problem. What’s more, losing the confidence of the bond market could prove painful, since it is widely known that our fiscal trajectory is unsustainable and market sentiment may therefore shift quickly and unpredictably. In any case, as the economy recovers, the dominant problem will move from depressed demand to excessive budget deficits.

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September 7, 2010 · Filed Under economy


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