Here's what it would mean (PDF):
A recent study by Alan Auerbach and William Gale projects that tax revenue would have to be permanently increased by 4.6% of GDP just to keep the debt-to-GDP ratio at the current level over the next 75 years under the current law scenario (i.e., allow the Bush tax cuts to expire). They refer to this as a fiscal gap of 4.6%.
If the Bush tax cuts were permanently extended the estimated fiscal gap rises to 7.2%. They project that by 2085, debt as a percentage of GDP would approach 600% under the current law scenario and 900% if the Bush tax cuts are extendedextraordinary levels that are unprecedented for the U.S.
Current GOP policy - no tax increases, no entitlement cuts, no defense cuts - means turning a long-term fiscal emergency into a catastrophe.
There's a decent case for putting off the immediate sunsetting of the Bush tax cuts solely on the condition that it may help the economy recover in the short term and allow time to debate and enact systemic tax reform and big future entitlement and defense cuts. But that's a purely short-term option - and, in any case, political fantasy. Long-term, there is simply no credible, responsible fiscal case for preventing any sunsetting, especially for those earning over $250,000, unless you want to gut Medicare, defense and significantly re-jigger social security. The GOP has shown no signs before this election of being serious about any of these things, in fact, they are actively using the Medicare cuts in the health reform bill against Democrats. The Democrats, in turn, may resist any real entitlement cuts long-term. We'll see.
But the only hope I can see is Obama. And perhaps some sane Republicans and moderate Democrats who have somewhere been hiding out in the woods, and are the likeliest to be wiped out on Tuesday.