Rep. Kevin Brady (R-TX), Vice Chairman of the Joint Economic Committee, released the attached Republican Staff Commentary analyzing today's Bureau of Economic Analysis's advance estimate for Gross Domestic Product (GDP) in the third quarter of 2012. "This commentary," Brady said, "makes clear that strong economic growth, rather than "feel good economic tinkering' is a proven key to reducing the budget deficit."
Brady continued, "If President Obama had led merely an average economic recovery rather than the weakest recovery since WWII, this year's federal budget deficit would be cut by more than half. And if Obama had achieved a Reagan-style recovery, the deficit would be two-thirds smaller."
"The President has it wrong. The proven way to get America's financial house in order is not higher taxes and initiating more federal entitlements like ObamaCare, it's higher economic growth and spending restraint."
The Republican Staff Commentary notes the anemic growth of the current recovery has contributed to the nation's budget deficits. At present, the current recovery has a gap of more than $1.2 trillion in real GDP compared with the average of the other nine recoveries since World War II. Revenues in the just ended fiscal year amounted to 15.5% of 3rd-quarter GDP. Prior to the recession, in fiscal year 2007, revenues amounted to 18.2% of 3rd-quarter 2007 GDP.
If economic growth had matched the average growth of the other nine recoveries and revenues had returned to their 2007 level as a percent of 3rd-quarter GDP, the budget deficit would have been more than halved.