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It's no surprise to hear Goldman Sachs' economics department predicting doom. But how unusual to have the prediction based on the possible expiration of the 2003 tax cuts -- which Goldman said would do nothing good the economy when they were proposed back in 2003.

...the firm's econ wonks decided to try and simulate the real-world effect of letting the Bush tax cuts expire at the end of 2010. Using the respected Washington University Macro Model, Goldman reset the tax code to its pre-Bush status, assumed all tax cuts expired, and watched how the economy reacted as 2011 began. What did the firm see? Well, in the first quarter of 2011 the economy dropped 3 percentage points below what it would have been otherwise. "Absent a tailwind to growth from some other source," the analysis concludes, "this would almost surely mark the onset of a recession."

Thanks to Jameson Campaigne for the link.

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