Peter Orszag says we should cut government spending and that is significant.
You see, Orszag is the former Deputy Director of Economic Policy at the Brookings Institution — they are the folks who said the solution to the Fannie Mae/Freddic Mac is a total government takeover (seriously) — and is currently Nancy Pelosi and Harry Reid’s Director of the Congressional Budget Office.
In a letter about tax policy dated Thursday, July 17, Orszag said:
“Legislation to limit the growth of the AMT or to extend the tax reductions beyond 2010 would increase federal budget deficits and federal debt, relative to those that would occur under current law, unless offsetting changes in federal taxes or spending were also enacted.”
We haven’t had a tax increase on the federal level in fifteen years and sober heads will likely prevail to extend that streak.
That leaves “legislation to limit the growth of the AMT” and “to extend the tax reductions beyond 2010” and “offsetting changes in … spending” as the only politically palatable fiscal actions.
Now that Peter Orszag understands this, someone tell him to call Steve Beshear, Greg Stumbo, and David Williams.