The proposed fiscal deal between Republicans and Democrats will provide a big boost to growth in 2011 because the compromise gives both parties what they wanted and adds the cost to the deficit.
The result is an extra fiscal stimulus of $1,000bn during the next two years rather than letting the Bush-era tax cuts expire.
Economists expected some or all of the cuts to be kept, but a big surprise is the 2 per cent cut to employee payroll taxes for 2011 that Barack Obama, president, extracted from Republicans, that will save about $2,000 for some families.
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