Steven Pearlstein, a great economics columnist by all accounts, is from that planet:
The macro view, from the forecasting firm Macroeconomic Advisers of St. Louis, is that not extending tax cuts for high-income households would reduce gross domestic product growth by — drumroll here — two-tenths of one percent in each of the next two years. And the difference in the unemployment rate? A whopping one tenth of one percent!
I have to say, two-tenths of one percent of growth sounds pretty non-trivial to me, and the same goes for one tenth of one percent of unemployment. This is one of the reasons I’m so concerned about mass incarceration.
As I’ve said on more than one occasion, I agree with Josh Barro: a temporary extension of all of the 2001 and 2003 tax cuts followed by comprehensive tax reform that will raise revenue to sustainable levels is the right approach. Raising taxes on high-earners between now and 2015 isn’t going to solve our fiscal problems. Let’s talk about reforms that will.