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The Payroll Tax Cut and U.S. GDP Growth

December 27, 2011

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Blog posts represent the views of CFR fellows and staff and not those of CFR, which takes no institutional positions.

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Breaking Down 2011 U.S. GDP Growth

U.S. annualized real GDP growth of 1.2% through Q3 2011 was driven by personal consumption, accounting for 91% of it.  Yet only 44% of personal consumption growth was driven by higher incomes.  The other 56% was accounted for by unsustainable items: a decline in savings (36%) and the payroll tax cut (20%).  The latter will expire in two months time unless Congress acts to extend it again.

Orszag: State Lawmakers Can't Find Common Ground Either

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Analysis Brief: Can Washington Fix Its Debt and Deficits?

Video: World Economic Update

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Budget, Debt, and Deficits

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