Letter to the Editor

Grow the GDP

Paso RoblesMarch 22, 2013 

In 2007, before the recession, the national debt was manageable at 1.2 percent of the gross domestic product. This was true despite the debt’s doubling during the Bush administration, due to the tax cut and two wars.

Now, the debt is 11.1 percent of the GDP, in spite of the fact that the dollar amount is smaller than when Obama took office. The problem is not that spending is up, but that GDP is down, due to the recession. Sales are down, mainly because income to laid-off workers is down. Businesses can’t produce more and hire more people as long as sales are down, no matter what the tax rates.

The solution is to find ways to grow the GDP, not to cut spending, which lowers GDP by lowering incomes and thereby lowering sales.

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