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alstry (35.41)

50% of GDP is From The Deficit

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April 28, 2011 – Comments (1)

After consulting with a PhD physicist, and applying the generally accepted multipler figures from a variety of economists...it is now evident that anywnere between 40% and 70% of our GDP is a product of the deficit.

Our Federal Deficit is about $1.6 trillion dollars.  That deficit goes to pay medicare, food stamps, and the salaries of government employees.  When the employees receive those funds, they pay taxes and also spend it at various vendors driving revenues.

Those vendors pay taxes on those receipts and also spend that money at other vendors.  After factoring an aggressive 10% savings rate, it easy conclusion to place a 4.5 mulitplier on the deficit to GDP contribution.  The Reagan administration put a 5X number on trickle down economics when it was running a deficit.  McDonalds puts a 3X deficit on the pay it gives its minimum wage employees.

It is now easy to understand why government officials can't cut deficit spending....if they do, our economy would collapase and nearly everyone in America would be broke.

Paul O'Neill: People Who Refuse To Raise The Debt Ceiling......

Although the deficit may only be 10-12% of GDP....its creation multiplies into at least 50% of GDP.  Could you imagine how much GDP would expand if we simply gave every Food Stamp recipient $100,000 per year just like we pay many government workers?  And then if we paid every soldier $250,000 per year just like we pay private military contractors?

Just think how much income tax receipts would increase? 

In an economy that depends on a deficit to function, it becomes a very convulsive question on who is entitled to deficit dollars and how much.

1 Comments – Post Your Own

#1) On April 28, 2011 at 7:02 PM, alstry (35.41) wrote:

Correct link from above:

http://www.zerohedge.com/article/paul-oneill-people-who-refuse-raise-debt-ceiling-are-our-version-al-qaeda-terrorists

You know when politicians claim that not letting them borrow makes you a terrorist....one wonders if borrowing is that important, why can't ALL Americans borrow?

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