Sunday, December 12, 2010

The New Tax Plan and Multiplier Effect

Mark Zandi on Moody's/Dismal Scientist makes his forecast as to how the Obama/Republican Tax Deal will affect the economy - overall positive, but at a cost. In his forecast he has two interesting charts. The first is the multiplier effects of different parts of the plan. This chart could be an interesting teaching tool to show how different types of programs have different multipliers:






































The second chart is the long-term forecast of the economy over the next several years and how the tax cut will effect both short and long term economic plans:



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