Bush, of course, is convinced that dynamic analysis is the way to go. His budget proposal for 2007 proposed establishing a Treasury Division on Dynamic Analysis. I wonder if the 147 or so people laid off from the estate tax audit team will move over to Dynamic Analysis to figure out how to paint rosy scenarios for the way eliminating the estate tax on multimillionaires will cause the economy to take off in a new spurt of growth?The report, apparently authored by noted government economist Rosie Scenario, states that its projections will only be achieved if there is "an offsetting change in government revenues or spending." In other words, there will be significant budget deficits as a result of the tax cuts unless we cut government services. As I pointed out previously, it is mathematically impossible to balance the budget based on cuts in non-military, discretionary spending. This means that the economic benefits of the Bush tax cuts can only be realized if the cuts are made up by subsequent tax increases.
Got that now?