And We Are Live at Salon...

Complaining about the White House's spin on the deficit:

Salon.com | Deficit games: There has been good news about economic growth and tax revenue this year, but not $120 billion worth. By highballing early estimates of the deficit, and claiming that lower deficits than their own previous forecasts show that tax cuts pay for themselves, the Bush administration can keep the big-spending and the low-taxes and the balanced-budget Republicans all inside their shrinking tent for just a little longer. That explains why they've summoned the cameras and microphones this afternoon.

But if you are actually interested in what is good for the country, and what the effects of tax cuts on the economy are, you will learn nothing from this press event. Remember: "political effectiveness was the priority, not the accounting deficiencies of government."...

One paragraph in the draft that I wish Salon had kept:

Gregory Mankiw--chosen by George W. Bush to chair his Council of Economic Advisers and be his chief economic adviser in 2003-2004--and his coauthor Matthew Weinzierl provide us with their answers to this question in "Dynamic Scoring: A Back-of-the-Envelope Guide". Mankiw and Weinzierl say that, initially, you have to cut spending by almost the entire amount of the tax cut. But if you do so, they say, you find that the economy does grow faster with lower taxes: people work more, people hide less income, and more is saved and invested. In that long run that economists love so much, you only have to cut spending by five dollars out of every six in order to finance a cut in taxes on labor, and you only have to cut spending by one dollar out of every two in order to finance a cut in taxes on capital. This is... in accord with the consensus of professional economists: tax cuts that do not unbalance the budget do increase economic growth, but not to the extent that you don't need to cut spending at all...