“When American families spend more on things like clothes, cars, furniture, and food, for example, this spending generates greater profit for businesses and increased demand that causes businesses to invest and hire more workers.”
If Washington fails to agree on the president’s proposals, the resulting tax increases “could cut the growth of real consumer spending by 1.7 percentage points in 2013 … [and] slow the growth of real GDP by 1.4 percentage points,” the report added.
That reduction from the nation’s growth rates would return U.S. economic growth to only 0.6 percent, given the economy’s recent 2 percent growth rate.
GDP growth has averaged 3.25 percent since 1947.
Republicans say the current slow growth is caused by Obama’s profligate spending and enthusiastic regulation of critical economic sectors, including health, banking, education, energy and housing.
Also, the formal unemployment rate has remained high; it was 7.9 percent in October. More realistically, roughly 23 million Americans are unemployed or underemployed, and many more are worried about their finances, their careers and their relatives’ job-prospects.
The national debt has grown to $16.3 trillion because the government has tried to jump-start the economy with almost $5 trillion in borrowed funds.