CBO: President’s Budget Will Reduce GDP

By CBO’s estimate, under the President’s proposals, the nation’s real output during the 2013–2017 period would be, on average, between 0.2 percent lower than the amount under current law and 1.4 percent higher than under current law. For the 2018–2022 period, CBO estimates that the President’s proposals would reduce real output, on average, by between 0.5 percent and 2.2 percent compared with what would occur under current law.

Full Greg Mankiw post on the President’s budgetary proposals’ effect on the nation’s real output worth reading.

Comments (3)

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  1. Keith says:

    I am not sold on this. While tax revenues might decrease and the governemt deficit increase; disposable income will rise with lower taxes, while business and producers will have incentives to increase supply to respon to increased demand (consumption). I think this will stimulate the economy and increase output.

  2. Devon Herrick says:

    If the CBO believes the President’s budget will slow the growth in GDP, it’s probably much worse than is being reported. The CBO saying the president’s plan will slow economic growth is like telling your company’s stockholders that the CEO’s strategic plan will slow the growth in earnings. It’s never good for job security — even if you’re right.

  3. brian says:

    Could be, but there are other variables to consider…..many unknowns, esp. on the international side over the next decade.