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New Cost Estimate for Economic Stimulus/Spending Bill

The Congressional Budget Office has produced a cost estimate for the conference agreement on H.R. 1, the American Recovery and Reinvestment Act of 2009 – the version of the bill being debated in both the House and the Senate today.

Our number crunching comes up with the following results: The bill costs the average U.S. family about $3,300, and it raises the national debt by about $7,700 per family.

Let’s go through that.

The bill spends about $5,500 per family, or $1,750 per person.
It reduces taxes by about $2,200 per family, or $700 per person.
Total cost (using our methodology): $3,300 per family, or $1,050 per person.
Added to national debt: $7,700 per family, or $2,450 per person

These are net present value figures. That means the value today of the spending and tax reductions in the future. In terms of spending, for example, it’s the amount you would have to put in the bank today to fund spending over the next ten years (which is as far as the cost estimate goes). And for tax reductions, it’s the value today of tax savings that will accrue over the next ten years.

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WashingtonWatch.com Digest - February 17, 2009 - The WashingtonWatch.com Blog

[…] On Friday, Congress passed H.R. 1, the American Recovery and Reinvestment Act of 2009. The bill costs just under $3,300 per U.S. family, and increases each family’s share of the national debt by about $7,700. Read more about it here. […]

Ed Turner

How much per taxpayer vs per person. For that matter how many tax payers are there? I know people with a few kids and a house who don’t pay any taxes but make pretty good money.

Jim Harper

Tax incidence is very hard to calculate – though we’re working on it. A rough estimate might be that about half of the people in the country are income taxpayers. Everyone pays corporate taxes, and some of the others, indirectly. So you might roughly double the number.

The accumulation of national debt affects everybody, taxpaying or not, of course, by raising the cost of credit and suppressing economic growth over the long run.

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