The best way bring down budget deficits is through a growing economy that naturally generates more tax revenue, reduces the strain on government safety net programs, and enables the government to more affordably service our national debt.
Slashing government spending in ways that hurts economic growth would be decidedly unhelpful. Conversely, public investments that catalyze growth in the private sector can help the fiscal outlook greatly. Key public policies that can underpin private innovation, investment, and competitiveness, and thus economic growth, include:
- Improving education
- Public investments in basic scientific research
- Jumpstarting new technologies in low carbon energy and health
- Ensuring availability of credit
- A fair, responsible tax system for individuals and corporations
We cannot afford to do everything we might like, but, in making tough decisions, the commission’s proposals need to be constructed with an eye on medium- to long-term
economic growth as much as on medium- to long-term fiscal deficit reduction. Without the former it will be impossible to have the latter.
For more on this topic please see:
- The Big Questions by John Podesta and Michael Ettlinger