I take a back seat to no man in my admiration of Charles Krauthammer, but could someone around here take a look at his math? Because I’m a little confused (I know, I know, many would call that a profound understatement). For instance, White House and GOP talking points notwithstanding, keeping tax rates where they are is not a stimulus. It might have a stimulating effect by reducing uncertainty etc. Indeed, I think that’s the case. But how does maintaining the status quo (and raising the estate tax from its current level) pump new money into the economy? Also, I understand that for deficit accounting, many people buy into the idea that tax cuts are indistinguishable from spending increases. But that seems like a separate argument from whether or not this deal provides a second, even bigger, stimulus.
Obviously some things in the tax deal are stimulative, like the payroll tax cut (which I think should have been split between employers and employees). But I’d just like to see a break out of how Charles gets to $1 trillion in new stimulus spending.