Are There Any Economists Who Think the Economy Will Be Too Weak in 2011 to Absorb Tax Increases on the Wealthy, But Strong Enough to Absorb Budget Cuts?

In discussing President Obama's budget, the Washington Post (a.k.a. Fox on 15th Street) tells readers that: "some economists worry that even in 2011 the economy may be too fragile to absorb a tax increase." It then tells adds "some Democrats joined Republicans in complaining that the budget plan does not go far enough to narrow the yawning budget gap." While no economists are identified with the view that President Obama's tax increases on the wealthy in 2011 will harm a fragile economy, the article does not discuss at all the economic impact of the cuts in spending that "some Democrats" and Republicans apparently favor. The multiplier for almost possible spending cuts would be considerably larger than the multiplier for the tax increases on the wealthy. Any economists who were concerned that tax increases in 2011 could harm a still weak economy would almost certainly be much more concerned about the prospect of spending cuts in that year.

--Dean Baker