As an economist, I have been studying the effects of taxes on the economy for over a decade, first as a professor at Columbia University, then as a senior economist at the Federal Reserve, and now as a resident scholar at the American Enterprise Institute. I strongly support the plan proposed by President Bush, and appreciate the opportunity to share my reasoning with you.
Large Surpluses Make Tax Cuts Affordable.
While there are significant risks to this forecast, the odds are that it will be revised upward in subsequent revisions. I expect this to happen for two reasons. First, academic research has shown that revisions tend to be positively correlated over time. If there is an upward revision to today's CBO forecast, there is more likely to be another upward revision the next time as well. Relative to GDP, even that surplus would be remarkable by historical standards.