We know that higher income households are more likely to bank the cash than spend it. As a result, tax cuts for these high-earners will do relatively little to boost the economy in the short run.
He seems to be worried that extending the cuts cause a mal-distribution. Then why not let them expire?
No, that is too simple, instead:
So why not take that $75 billion and give it to those who are more likely to spend it
He is talking about the $75 billion that is going to high income earners. First, the money is gone, gone to high income earners. Howard is just talking about an offset to undo the maldistribution caused by extending the cuts. In other words, he claims the cost of extending the cuts can be recovered, partially, by going farther into debt and having Congress make a profit on that debt!
That is nutty tax policy.
Why does Congress want to extend the Bush tax cuts? Because if they tax the rich, the rich will stop any additional spending, and it is Congress who is most likely to spend excessively.
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