Stimulus opponents -- those who said it wouldn't work -- want to extend the Bush tax cuts because the economy needs more stimulus:
A Gift the Wealthy Don’t Need, by Robert Frank, Commentary, NY Times: A central lesson of the Great Depression was that economies mired in deep downturns seldom recover quickly on their own. Consumers won’t spend because they’re worried about losing their jobs — if they haven’t lost them already — and are busy paying down debt. Companies won’t invest because they already have more than enough capacity to satisfy existing demand. That leaves government. It’s the only remaining actor with both the means and the motive to bolster total spending substantially.
Yet in 2009, when economic stimulus legislation was proposed in Congress, many people insisted that the extra government spending would do no good. ... [S]timulus opponents — a group that includes most Republicans in Congress and sometimes a handful of Democrats — have gone on to advocate cutting existing programs, like food stamps and Medicare. They have repeatedly blocked extensions of long-term unemployment benefits. Most recently, they have joined European deficit hawks in calling for further spending cuts to prevent national insolvency — a threat that financial markets have discounted.
Now stimulus opponents want to extend the tax cuts of President George W. Bush — cuts that are scheduled to expire at year-end. Almost all professional economists believe that those cuts have already increased the national debt by hundreds of billions of dollars. Even Alan Greenspan ... has publicly opposed their extension. The Obama administration wants to eliminate the tax cuts for families earning at least $250,000 a year, and for individuals earning at least $200,000.
WWhy, then, do stimulus opponents want to keep them? Brace yourself: it’s because the economy needs additional stimulus, they say. As the Senate minority leader, Mitch McConnell of Kentucky, said..., “Raising taxes in the middle of a recession is not a good idea.” ... With the economic recovery clearly sputtering, could they be correct to insist that the Bush tax cuts on the wealthy be extended?
Alas, no. ... Because most poor and middle-income families consume their entire income, higher tax rates for those families would indeed deprive the economy of much-needed short-run stimulus. But extending the Bush tax cuts for the wealthiest families would be one of the worst possible ways to stimulate spending. These families typically consume much less than their income. Instead of trying to use up all their savings before they die, most prefer to leave substantial bequests. Letting their tax cuts expire might reduce those bequests, but it will not reduce their current consumption significantly.
It will, however, generate revenue that could be used to bolster spending in a host of ways that would be useful even apart from the stimulus effects. Because state and local government budgets are in shambles, hundreds of teachers, police officers and firefighters are being laid off every week. Federal grants could keep them on the job. ...
To bolster current spending without adding more to deficits than necessary, we have no better option than to let the Bush tax cuts on the wealthy expire as scheduled.