I have posted an updated plan to cut spending by one fifth and balance the federal budget. These cuts are not the only ones needed, but they are a mix of reasonable reforms spread broadly across the government.
A new poll discussed in Govexec.com finds that “Americans have more confidence in the abilities of individuals and local organizations to effect positive political and social change in this country than they do in the federal government … Fifty-eight percent of respondents said they believed the federal government was ‘mostly hurting’ the country with respect to the ‘major issues and challenges’ confronting America today.”
My fellow Americans, you have it exactly right. The enormous size of the federal government is harming the economy, society, individual freedom, and good governance in the nation. That is why spending cuts would be a good idea whether or not the federal government was running budget deficits.
Some economists claim that cutting government spending would hurt the economy, but that idea is based on faulty Keynesian theories. In fact, federal spending cuts would shift resources from often mismanaged and damaging government programs to more productive private sector activities, thus increasing overall productivity, output, and incomes.
The federal government’s fiscal mess is an opportunity to make reforms that would both spur growth and expand freedom. My new plan includes a menu of cuts to individual subsidies, business subsidies, so-called entitlements, aid to the states, and the military. There are also numerous activities that can be removed from the federal budget by privatization, such as air traffic control, passenger rail, and electric utilities.
These and other reforms are discussed further in essays at DownsizingGovernment.org.
Chris Edwards is the director of tax policy studies at the CATO Institute and editor of www.DownsizingGovernment.org. He is a top expert on federal and state tax and budget issues. Before joining Cato, Edwards was a senior economist on the congressional Joint Economic Committee, a manager with PricewaterhouseCoopers, and an economist with the Tax Foundation.