The Congressional Budget Office (CBO) (2001) projected
that the 2001 tax legislation may raise or reduce the size
of the economy, but the net effect was likely to be less
than 0.5 percent of GDP in either direction in 2011, again
depending primarily on how the deficit was financed
in the long run. Analysis of the 2003 capital gains tax
cuts suggests that the net long-term growth effects are
negative—that is, that the negative effects of deficits
on capital accumulation outweigh the positive incentive
effects of such policies (Joint Committee on Taxation
2003; Macroeconomic Advisers 2003). Similar effects
for deficit-financed tax cuts have been found by the
Congressional Budget Office (2010).