This week, a wide array of economists joined Congressional Republicans in calling on Democrats to prevent their planned massive tax hike:
Mark Zandi, Moody’s Economy.com Chief Economist, who is often called upon by Speaker Pelosi and House Democrats for economic guidance, advised that “I would not allow those tax increases to take hold on January 1st either.”
James Bullard, President of the Federal Reserve Bank of St. Louis, warned “Increasing taxes while you’re trying to get the economy to recover is not a good plan.”
Experts at Deutsche Bank announced that failing to prevent the looming tax hikes would halt any economic recovery. These experts specifically noted that failing to block all the tax hikes would reduce GDP growth by over 1 percent.
Economists at Barclays Capital estimated that failing to block the pending tax hikes would cause the Standard & Poor’s 500 Index to decline by almost 9%.
These economists are echoing the analysis by Dr. Christina Romer, President Obama’s chief economist, whose research found that tax hikes “have a very large, sustained, and highly significant negative impact on output.”
At a time when economic growth remains stagnant and the unemployment rate hovers around 10 percent, these experts recognize that the Democrats’ planned massive tax hike would cripple the economy and destroy jobs.