Gross domestic product Archives

Heading In The Right Direction – GDP Grew by 4.1 Percent

The third and final estimate of third quarter U.S. GDP by the Bureau of Economic Analysis is out.

GDP grew 4.1% at an annualized rate in the third quarter, according to the estimate. Economists predicted growth of 3.6%, in line with the second estimate published by the BEA earlier this month.
Personal consumption growth surged to 2.0% from the previous 1.4% estimate.

The GDP price index came in at 2.0%, as expected, while core PCE was 1.4%, slightly below the previous 1.5% estimate.

A buildup in inventories contributed 1.7% to GDP growth in Q3, unchanged from the previous estimate (private businesses increased inventories $115.7 billion in the third quarter, following increases of $56.6 billion in the second quarter and $42.2 billion in the first.)

Tim Pawlenty’s Policies Makes Bush Tax Cuts Look Liberal

Tim Pawlenty came out with his economic proposal, a financial calamity that would make the Bush Tax cuts look as if it was proposed by former Representative and ultra liberal Alan Grayson. Some of the numbers in the Pawlenty plan are:

Reducing the top individual income tax rate from 35% to 25%
Reducing the top Corporate tax rate from 25% to 15%
Completely eliminate capital gains taxes, taxes on dividends and interest, and the estate tax
Having just two income tax brackets, 10 percent and 25 percent

These drastic steps by Pawlenty are supposed to reduce the federal deficit, but according to the Tax Policy Center, the Congressional Budget Office and the IRS, even if all Pawlenty’s figures add up, revenue generated would be just 13.6 percent of GDP from 2013-2021, and equals a tax cut of $11 trillion over the same time. In comparison, the Bush’s tax cuts were three times smaller than what Pawlenty is proposing.

To put things into perspective, the nice folks at The Center on Budget and Policy Priorities did their research and came up with the following chart.