Former Obama Econ. Advisor Romer says raising taxes by 1% of GDP to reduce deficit will reduce GDP by 3%

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"Christina Romer, who was chairman of Mr. Obama's Council of Economic Advisors, has...concluded that increasing taxes by 1% of GDP for deficit-reduction purposes leads to a 3% reduction in GDP."...

8/19/11, "Change for the Worse," Wall St. Journal, Pete Du Pont, "Just as he promised, Obama has fundamentally transformed America."

"Just before his election as president, Barack Obama declared that "we are five days from fundamentally transforming America." He has made good on that promise. Huge increases in federal spending—up 28% in just three years—were the beginning. Putting health care—17% of the American economy—under Washington's control was next. Government control of business is expanding too: 379 new government business rules were added in July alone, according to Sen. John Barrasso of Wyoming. Federal government debt held by the public rose from $6 trillion (40% of GDP) in 2008 to $9 trillion (62%) in 2010, The Congressional Budget Office says it could reach 200% by 2037, if the economy doesn't collapse first.

Mr. Obama's original budget for fiscal 2012 would have more than doubled the debt held by the public, from 2010's $9 trillion to $19 trillion in 2021. Politico reports that by the 2013 inauguration, the government will have taken on addition debt to the tune of "$22,500 for every man, woman, and child in the nation" during Mr. Obama's tenure. Some 45 million Americans, or 1 in 7, receive food stamps, up from less than 30 million a few years ago. Finally, in the previous two years our annual economic growth after inflation has averaged only 1.3% annually, just about half our past 10-year average of 2.5%. In the first half of this year, it was running at an annual rate of 0.8%.

The White House says unemployment will decline to 8.25% this year, though it may well remain above 9%. Looking back at the past 50 years, no president has been re-elected when unemployment was higher than 7.2%.

One of the Obama administration's central (and most damaging) beliefs is that tax rates must be raised for what President Obama calls "millionaires and billionaires," which he defines to include individuals and small businesses making as little as $200,000. Interestingly, Christina Romer, who was chairman of Mr. Obama's Council of Economic Advisors, has done some research on the impact of tax increases, and concluded that

• increasing taxes by 1% of GDP
  

• for deficit-reduction purposes leads to a 3% reduction in GDP....

More than 58 million taxpayers, around 42% of tax filers, paid no income tax at all....

His latest challenge may well be from Texas Gov. Rick Perry's fresh presidential campaign speech: "The fact is, for nearly three years President Obama has been downgrading American jobs, he's been downgrading our standing in the world, he's been downgrading our financial stability, he's been downgrading our confidence and downgrading the hope for a better future for our children. That's a fact." Indeed it is, and it's a fact

• that bodes ill for the future of America."

via Hot Air