Interesting article in this week’s U.S. News & World Report:  What’s Worse, the AMT or a Recession?, by James Pethokoukis:

Now this would hurt. If the politicians in Washington do nothing, 23 million Americans will get hit by the AMT next year, up from 4 million this year. A temporary fix to the AMT will cost some $45 billion to $50 billion. Repealing the AMT, according to the CBO, would cost more than $600 billion over 10 years. Now under new pay-as-you-go rules in Congress, any fixes or repeals will have to be paid for through higher taxes or budget cuts. One payment possibility suggested by some on the left is to repeal the Bush 2001 and 2003 tax cuts, under the logic that many taxpayers will get caught by the AMT because the Bush tax cuts lowered their tax bill. (The biggest problem, though, is that the AMT is not indexed for inflation.)

According to the static economic models of the CBO, repealing the Bush tax cuts would bring in hundreds of billions in new tax receipts every year with scant effect on economic growth. But, you might ask, wouldn’t the accompanying huge tax increase dramatically slow the economy, thus hurting tax collections to some degree? Not if you look at the CBO numbers, which show the economy barely slowing after the tax cuts expire in 2010.

But is that how the real-world economy would actually react? Not according to a study by Goldman Sachs. Using the highly regarded Washington University Macro Model, Goldman ran a simulation that assumed all the Bush tax cuts expired in 2010. According to the WUMM model, the economy fell 3 percentage points below what it would have been otherwise–even assuming massive Federal Reserve rate cuts. "Absent a tailwind to growth from some other source," the analysis concludes, "this would almost surely mark the onset of a recession."