Cutting the U.S. Budget Would Help the Economy Grow
In this backgrounder for Hertiage, Romina Boccia writes that as the House and Senate budget conference meets to decide the fiscal course of the United States, lawmakers should focus on reducing federal spending. Federal spending is growing rapidly and will accelerate outside the 10-year budget window. Even though tax revenues are projected to grow faster than spending over the next decade, the nation faces chronic and increasing deficits. Research finds that high spending, high debt, and tax increases are harming economic growth and prosperity. Putting the budget on a path to balance with spending cuts would spur economic growth by reducing uncertainty and freeing up resources for investment and job creation. As the European crisis demonstrates, the option of making gradual changes will expire, and Americans and the U.S. economy will suffer a self-inflicted wound from unavoidable austerity measures if lawmakers continue to procrastinate the inevitable.