Deficit Reduction: $38 Billion Won’t Cut It

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Date

2011-04

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The Mosbacher Institute for Trade, Economics & Public Policy

Abstract

Washington is awash in red ink, and no one seems willing to make the hard choices needed to set our fiscal house aright. Congress’ recent boast of cutting spending by $38 billion makes the problem seem just about solved. On the left, talk of letting the Bush tax cuts expire for those with annual incomes over $250,000 gives the false impression that only very rich taxpayers need sacrifice. And even that timid approach couldn’t get past a lame-duck Congress. On the right, many newly elected Tea Partiers claim that we can simultaneously cut expenditures and taxes. The deficit problem is huge and fixing it will affect us all. Cuts in Medicare, Medicaid, and Social Security must be part of any solution. Even with big spending cuts, tax increases are inevitable. Only a return to compromise and sacrifice can secure our fiscal future.

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federal deficit

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