Can We Cut Our Way to Prosperity?

by Matthew Glans on March 1, 2011

As federal and state legislators across the country propose their new budgets, debate has raged over what cuts or tax increases need to be made to cover the budget deficits plaguing most legislatures. From Washington to Wisconsin, elected officials are struggling to find ways to cover budget gaps, with agreement difficult to find across both sides of the aisle.

In a new article recently published in the Frum Forum, Eli Lehrer, vice president of DC operations for The Heartland Institute, examines this debate and discusses the role of spending cuts and their effects on the overall economy. While spending cuts may hurt the economy in the short term, Eli contends, these cuts benefit the economy in the long run, creating prosperity.

“There is significant evidence that a big government and giant debts are holding back the economy by misallocating funds that the private sector could make better use of than the government. Although some countries – China – have, indeed, spent their way to significant economic growth, the best economic turnarounds have happened in places like Canada and New Zealand that have stabilized spending and kept it at reasonably low levels.

So yes, reducing government spending in the wrong way – theoretically – could hurt the economy but, on balance, evidence shows that a nation can, indeed, cut its way to prosperity.”

Eli’s article, “Can We Cut Our Way to Prosperity?” was originally published in the Treasure Coast Palm February 28 and is available online at: http://www.frumforum.com/can-we-cut-our-way-to-prosperity

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