> Goldman Sachs Economics writes:
>
> >* Together with previously passed fiscal measures, our best estimate
> >is that the latest federal tax cut package will provide stimulus of
> >about $70 billion in 2003 and $50 billion in 2004 (calendar years).
> >The impulse is heavily concentrated in the next 12 months.
>
> That's about 1.2% of GDP, spread over two years. Significant, but not
> gigantic. But all you gloomsters out there better add this variable
> to your mental models.
But the effect of the stimulus depends on the marginal propensity to spend, no? Didn't a couple economists recently estimate that the bulk of the last tax cut -- what was it? 75%? -- was saved?
Seth