On the recordMay 13, 2010
The Federal Government is deep in debt and digging fast. We all know the importance of balancing the Federal budget, but we disagree on how to do that. How can we reduce the deficit without hurting our economy? Do we cut spending, or do we raise taxes? I have here an analysis from two Harvard professors looking at how large changes in fiscal policy affect deficits and economies. Their research shows that 'fiscal adjustments based upon spending cuts and no tax increases are more likely to reduce deficit and debt over GDP ratios than those based on tax increases.' The authors looked at decades of economic data around the world and came to the conclusion that it is best to go about reducing large deficits through government restraint and spending cuts. Some think that we can keep spending recklessly, raise taxes, and balance the books. This study shows that we must get our spending under control. Raising taxes only kills jobs in our economy, leaving the government in an even worse fiscal situation.
