Now, explain how deficit spending affects GDP

Now for the real Truth: Federal deficits are necessary for economic growth.

Consider this fundamental equation in economics: GDP = Federal Spending + NonFederal Spending – Net Imports. By definition, increased spending increases GDP. Federal deficits are the result of increased federal spending and/or decreased taxes. NonFederal spending is accomplished through tax cuts and federal spending.

Deficit reduction (aka “austerity”) is a 100% guarantee of recession.

Rodger Malcolm Mitchell

The Bush Tax Cuts expire at the end of 2012. They must be allowed to do so. The difference accounts, by itself, for 1/3 of current deficits. The War in Iraq is over. The War in Afghanistan will be over soon. The military expenditures for these wars accounts for another 1/3 of current deficits. The remaining third is accounted for by mandatory relief spending pursuant to persistently weak economic growth. Once we get GDP growing at 3 or 4 percent per year there will be no deficits at all. It is as if the pension manager lost the investment profits gambling in Las Vegas and then comes back and says we have to reduce benefits. Benefits are not too high. Income taxes are too flat. Congress has mismanaged and misrepresented the economy. Wealth does not create jobs unless invested with the prospect of profit. Profit is from sales, sales is from customers, so no customers, no profits, no investment and no jobs. It is not rocket science.

The President does not set levels of spending, taxing or borrowing – - he just gets to veto or accept what Congress enacts. Whatever is not right with the economy is the result of some Act of Congress. Whether or not the country gets a new President come January, what it needs is a new Congress – one that understands economics and finance like the present one does not.

The Government is helping the rich get richer when they do not pay their fair share in taxes.

In order to survive, the less fortunate receive help from the Government. Whereas, the GOP and the rich get richer when they DO NOT pay their fair share in Taxes

The rich takes from the Government in order to get richer and the less fortunate receives help from the government in order to survive; yet get poorer.