Nobody intended for the tax cut to have a Keynesian
effect, even w/no spending cuts. If you're a
keynesian, it's too small ($40b this year) and
maldistributed. If you're not, its size is
irrelevant.
mbs
In any event, J. Galbraith is, IMO, right in stating that if behind a tax
cut there comes a sharper cut in expenditure, it would make the tax cut
futile. What we have used in our model is the CBO published documents up
until beginning June, and we accounted for tax and expenditure changes that
were incorporated then. We did not want to speculate on different budget
proposals, simply because we did not know.
