How much can economic growth help the budget picture? CBO has an answer for us. According to Table B-1 of their January 2012 “Budget and Economic Outlook,” for every 1 percentage point in higher real economic growth, federal tax revenues swell by $2.8 trillion over the baseline. By the last year of the budget window, that amounts to $570 billion in prosperity-driven economic growth.
Economic growth that fast, which can only be realized by preventing the trillions in tax hikes which are scheduled, would be welcome. When combined with spending restraint, we could balance the budget and begin paying down the national debt without raising taxes on anyone.