November 14, 2013
Tax hikes, not spending cuts, are what’s holding down economic growth, Heritage Foundation economist Salim Furth reports:
The U.S. implemented both tax increases and spending cuts in 2013, but the tax increases were two to four times larger. Taking into account that the tax increases were larger and that tax increases have larger economic effects, we can safely conclude that any “austerity”-induced slowdown is due primarily to tax increases. Neither the basic historical facts nor the economic research on the topic give support to the idea that sequestration is the villain in 2013’s poor economic growth.
He concludes that “policymakers can allow higher growth and more jobs without adding to the deficit by replacing taxes with spending cuts.”
Do you think the government should raise spending, as many liberals propose?