Christina Romer: Obama's Secret Tax Cutter?

The new chair of the Council of Economic Advisers has written favorably of tax cuts.

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Obama's picks of Geithner and Summers were no surprise. (What no Goolsbee? Alas.) But the selection of Berkeley prof Christina Romer is interesting. Along with hubby, David, Romer wrote a fascinating paper on the wonderworking power of tax cuts. Their analysis found that "tax increases appear to have a very large, sustained, and highly significant negative impact on output ... [and] that tax cuts have very large and persistent positive output effects." The key, they found, is to also cut spending  so you won't get lured into raising taxes down the road. Bottom line: Cutting taxes good. Raising taxes bad.

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