Yea, but No...

I really don't like arguments that are true, but so incomplete that they may as well be false, which is why I'm not so fond of this Orszag article in the NY Times. I think my biggest gripe is with this line (and his subsequent arguments):

Yet no one wants to make an already stagnating jobs market worse over the next year or two, which is exactly what would happen if the cuts expire as planned.

The problem, of course, is that it's kind of garbage. Yes, if the tax cuts expire demand could go down a bit more, but it also might not. Savings rates have jumped dramatically, and if people are already saving as much as possible, then there might not be much cutting back to do, and ending the tax cuts will only reduce savings rates. Not that anyone has actually studied anything here. The problem is that it seems everyone takes the "ending the tax cuts will make the economy worse" meme at face value. People who want to end the tax cut point out that other stimulus would be much better.

I'm hardly Greenspan in terms of my views on fiscal discipline or the economy, and I don't think that ending the tax cuts would have no effect, but it is not clear to me that it would be more than a blip. If our economy is already pricing the tax cuts ending into it's behavior, then there will be no difference. If uncertainty is making things worse, then it is better to end them now (that would be more certain than a temporary extension).