Dec
22

Gross Deficit Product

Our annual deficit is 10% of GDP. A deficit of 3% is sustainable (trust me) and 2% of the deficit will melt away as the economy revives; leaving a deficit of 5%. Had the Bush tax cuts been repealed that would have reduced the 5% to 2.5%. What this means is that Congress has to find twice the value of the Bush tax cuts to get us to a stainable fiscal level. It may take a decade for voter to digest this.

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