Our fiscal policy goal should be smaller government, but here’s a video for folks who think that balancing the budget should be the main objective.
The main message is that restraining the growth of government is the right way to get rid of red ink, so there is no conflict between advocates of limited government and supporters of fiscal balance.
More specifically, the video shows that it is possible to quickly balance the budget while also making all the 2001 and 2003 tax cuts permanent and protecting taxpayers from the alternative minimum tax. All these good things can happen if politicians simply limit annual spending growth to 2 percent each year. And they’ll happen even faster if spending grows at an even slower rate.
This debunks the statist argument that there is no choice but to raise taxes.
[…] The numbers are out of date, but here’s a video that explains how spending restraint is the key to fiscal balance. And here’s a […]
[…] close with a video from 2010 that explains why spending restraint is the best way to achieve fiscal balance. Especially when […]
[…] close with a video I narrated which illustrates how modest spending discipline generates good […]
[…] more background information, here’s a video I narrated on this topic. It was released in 2010, so the numbers have changed, but the analysis is still spot […]
[…] a video I narrated on this topic of spending restraint and fiscal balance back in […]
[…] my video on spending restraint and fiscal balance from 2010. The numbers obviously have changed, but the […]
[…] my video on spending restraint and fiscal balance from 2010. The numbers obviously have changed, but the […]
[…] that’s the purpose of another video I narrated for the Center for Freedom and Prosperity back in 2010. The numbers obviously have […]
[…] that’s the purpose of this video I narrated for the Center for Freedom and Prosperity back in 2010. The numbers obviously have […]
[…] Here’s a Center for Freedom and Prosperity video that I narrated back in 2010, which explains why it is simple to balance the budget. The numbers in […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] This doesn’t mean that Senator Paul is in any danger of winning a Bob Dole Award, but it’s nonetheless unfortunate since a focus on deficits gives an opening for leftists to claim that they can achieve the same outcome with tax increases. This is why sponsors should focus on the importance of spending restraint, and then add explanations of how this eliminates red ink. This is the approach I took in this video showing how limits on the growth of spending would lead to a balanced budget. […]
[…] but not least, here is the video I narrated in 2010 showing how red ink would quickly disappear if politicians curtailed their profligacy and restrained spending […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] but not least, here is the video I narrated in 2010 showing how red ink would quickly disappear if politicians curtailed their profligacy and restrained spending […]
[…] but not least, here is the video I narrated in 2010 showing how red ink would quickly disappear if politicians curtailed their profligacy and restrained spending […]
[…] but not least, here is the video I narrated in 2010 showing how red ink would quickly disappear if politicians curtailed their profligacy and restrained spending […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
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[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] is the underlying message of my video showing how to balance the federal budget. Moreover, all of the countries in this video enjoyed significant fiscal progress by following the […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] back down to 18.2 percent of GDP (where it was when Clinton left office), we’d have a budget surplus before the end of the decade (even with all the tax cuts made […]
[…] you slice the numbers, America’s fiscal policy problem is too much spending. The solution, as I explain here, is to limit the growth of the federal […]
[…] you slice the numbers, America’s fiscal policy problem is too much spending. The solution, as I explain here, is to limit the growth of the federal budget. jQuery('#lazyload_post_0 […]
[…] you slice the numbers, America’s fiscal policy problem is too much spending. The solution, as I explain here, is to limit the growth of the federal […]
[…] a considerable degree, my video on balancing the budget makes the same point as reason #1 about why higher taxes are unnecessary. Simply stated, balancing […]
[…] a considerable degree, my video on balancing the budget makes the same point as reason #1 about why higher taxes are unnecessary. Simply stated, balancing […]
[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]
[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]
[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]
[…] fiscal policy is very simple. Restrain the size and scope of government so that outlays grow slower than the private sector. If that happens, the burden of federal spending will shrink as a share of economic […]
[…] Reading this column makes me feel wimpy. I’ve been assuming that Congress eventually will raise the debt limit, and my focus has been on getting Obama and the Senate to give up something in exchange – perhaps some sort of reform of the budget process to restrain spending as a trade for more borrowing authority. I’d like to see, for instance, a rejuvenated version of Gramm-Rudman that imposes limits on spending growth. […]
[…] Reading this column makes me feel wimpy. I’ve been assuming that Congress eventually will raise the debt limit, and my focus has been on getting Obama and the Senate to give up something in exchange – perhaps some sort of reform of the budget process to restrain spending as a trade for more borrowing authority. I’d like to see, for instance, a rejuvenated version of Gramm-Rudman that imposes limits on spending growth. […]
[…] But it’s also a high-stakes game. If Obama (or Reid) refuse to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]
[…] But it’s also a high-stakes game. If Obama (or Reid) refuses to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]
[…] But it’s also a high-stakes game. If Obama (or Reid) refuse to accept the fiscal reforms approved by the House and there is a stalemate, the federal government ultimately would lose its ability to borrow from private credit markets. And while that notion has some appeal for many of us, it almost certainly would require more fiscal discipline than the political system is willing to accept (i.e., actual deep cuts rather than just restraining the growth of spending). […]
[…] That certainly seems consistent with my proposal to solve America’s fiscal problems by restraining the growth of spending. […]
[…] That certainly seems consistent with my proposal to solve America’s fiscal problems by restraining the growth of spending. […]
[…] That certainly seems consistent with my proposal to solve America’s fiscal problems by restraining the growth of spending. […]
[…] That certainly seems consistent with my proposal to solve America’s fiscal problems by restraining the growth of spending. […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] I did these calculations last year, and found the same results. And I also examined how we balanced the budget in the 1990s and found that spending restraint was the key. The combination of a GOP Congress and Bill Clinton in the White House led to a four-year period of government spending growing by an average of just 2.9 percent each year. […]
[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]
[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]
[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]
[…] a bit of academic jargon in that passage, but the authors are basically saying that some sort of annual limit on the growth of government spending is a smart fiscal strategy. And such rules, depending on the country, would have reduced the burden of government spending by […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] government on some sort of diet so that the federal budget grows slower than the private economy. I explain in this video, for instance, that it is simple to balance the budget and maintain tax cuts so long as government […]
[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]
[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]
[…] the first imperative is to stop digging. It would be nice to actually cut spending, but simply limiting the annual growth of federal spending so that it grows no faster than inflation would yield…. The key to fiscal responsibility is making sure the productive sector of the economy grows faster […]
[…] (Dan Mitchell’s blog has a few more comments.) […]
[…] The video in this blog post explains that the budget can be balanced without tax increases through spending restraint: https://danieljmitchell.wordpress.com/2010/10/04/heres-how-to-balance-the-budget/. […]
[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]
[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]
[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]
[…] out how to reduce red ink. We already know from Congressional Budget Office data, however, that we can balance the budget fairly quickly by limiting the growth of government spending. As the chart illustrates, the deficit disappears by 2016-2017 with a hard freeze and goes away by […]
[…] chart shows what it would actually take to balance the budget over the next 10 years – and these numbers assume all of the tax cuts are made permanent and that […]
[…] chart shows what it would actually take to balance the budget over the next 10 years – and these numbers assume all of the tax cuts are made permanent and […]
[…] This rebuttal video, incidentally, only scratches the surface. There was not enough time to cite the wealth of data and research showing how higher taxes undermine economic performance. There was not enough time to address some of the additional flaws of class-warfare tax policy. And there was not enough time to show how simple it is to balance the budget without higher taxes. […]
[…] the bottom line. As shown in the graph, it is quite simple to balance the budget (and permanently extend all of the 2001 and 2003 tax cuts) if politicians simply limit spending […]
The underemphasized but crucial point came at the end of this presentation, almost as an afterthought. Entitlements have to be reformed to keep growth low. Dramatically reformed, as a matter of fact. That means doing big, unpopular things. I am not saying they cannot or should not be done, but it is misleading to make the process of balancing the budget sound like a piece of cake.
[…] the bottom line. As shown in the graph, it is quite simple to balance the budget (and permanently extend all of the 2001 and 2003 tax cuts) if politicians simply limit spending […]
[…] the bottom line. As shown in the graph, it is quite simple to balance the budget (and permanently extend all of the 2001 and 2003 tax cuts) if politicians simply limit spending […]
[…] the bottom line. As shown in the graph, it is quite simple to balance the budget (and permanently extend all of the 2001 and 2003 tax cuts) if politicians simply limit spending […]
[…] you look at real numbers and don’t get trapped into using “baseline” math (as I explain in my latest […]
Steve P – and all…
One thing that I think can work to bring down spending and deficits is to find ways to incent those who want to work [me and lots of others] beyond the retirement age to continue to do so – and make it a rational economic decision…
The retirement age of 65 was set when people did not live as long and when most workers had jobs that were pretty demanding physically.
But today, writing code or doing market research [what I do] is not physically demanding. I was listening the other day to an NPR interview with 90 year old retired Supreme Court Justice John Paul Stevens [not one of my favorite Supremes] and he is amazing in both is intellect and energy at 90.
Of course we are all different – but there is nothing magical about 65 or 66 or 70 or 75.
I would love to work into my 70s or 80s if I am fortunate enough to be around that long. I know that is not the right thing for everyone, but it may be time to see if we can make retirement age more dependent on what we need and less on what our age is.
Old Bull,
Your comments make sense, and you addressed many of the comments – except mine.
With the impending retirement of the Baby Boom generation, how does one cap entitlement spending (social security and medicare) at 2% per year?
Regards,
Steve
To finish my last thought
I am the father of a military family and our daughter barely escaped the Pentagon on 9/11 [a number of friends working in the next room were killed]. I am willing to have an honest debate on whether we as a nation want to declare war against “Radical Islam” and challenge the entire Muslim world to choose sides – and prove they mean it by extending equal rights to women as a first step and rejecting Sharia Law.
Old Bull,
Sorry if I came across as other than serious and informed…
I do think calls for shutting down entire departments and returning to a “Constitutional” footprint have a very low probability of success – perhaps I should have said that rather than calling them flip and naive…
And perhaps I am after something much different than Dan – or you are looking for.
I long for a return to a smaller and less intrusive government. I am in the tradition of Friedman and Buckley opposed to the criminalization of private, consensual behavior – including drug use and what happens in the privacy of one’s home.
I am against the demonization of smoking and drinking that we are now seeing extended into eating/food choices. I do believe that “Liberty” should include the freedom to make an informed choice on whether one smokes – drinks or does drugs.
Caps strike me as a bit cowardly – the net effect of caps if they are implemented and work as Cato/Dan envision that we will confront the more direct/explicit choices I prefer.
Heck this already happens – note the cries to save the jobs of teachers and firefighters when a local community tries to reduce it’s spending to live within it’s means. Do you – and Dan – believe that we will stick to the hard caps or will we find ourselves with no real change in government spending because we can’t cut “critical services” and make any caps ineffective with a long list of “reasonable exceptions”.
With regard to your “we’re at war with some nasty people” justification for continuing a high level of military spend I will only say that I am not prepared to change the world – we have tried that and it is a failure. Killing civillians with Predator drones is a war crime and has made us more hated than feared – which is the root cause of terrorism Rumsfeld cited in his 2004 report.
I am the father of a military family and
Lonely, feedback comes in many forms… Just look at the comments here. You say that the suggestion to limit the activities of the federal government is “flip and naive,” then go on to call for “reduced military spending, reduced wages and benefits for federal employees, and reductions in the federal workforce.” I assume you regard your suggestions as serious and informed, right? And then you dismiss the idea of spending caps because it ignores “mandated increases in spending.” Mandated by whom? Why, by the very body that would have to enact the spending caps, of course! Why do you think they can do one, but not the other?
Another commenter wants to legalize marijuana. Now that’s a major issue facing society, right? Smoking tobacco is bad, but smoking pot is good?
A third person wants to cut the size of the Defense Department. Um, have you noticed that we’re at war with some nasty people who seriously want to do us harm? Perhaps you should get serious, too.
Lastly, it’s easy to limit spending increases to 2%. Just get Congress to enact a law that requires that federal government spending grow by no more than 2% each year. If we can elect a Congress that will enact caps, we can certainly elect a Congress that will limit spending growth to 2%.
But first we have to be serious with our proposals. I think Dan’s ideas deserve a more serious response than I’m seeing here.
Daphne is right – the tie really is awful – hope it was not a gift from the kids…
I just have to note that we have 8 comments on this thread – and over at the Salon they generated over 400 for both the Greenwald war screed and the idiotic Firemen let the house burn post…
Think that data says something very scary about our future…
Time for Tiny Tim to say…
“God bless us all…
every one”
You know I love you, but the tie needs to go.
[…] Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint. […]
[…] Dan Mitchell of the Cato Institute calls “bull” on this. In this short video, he shows how one could easily balance the budget by doing something almost unheard of in Washington: showing some restraint. […]
How can you do this entire segment on the size of gov’t needing to be cut and not mention the Dept. of Defense?
I respect the Cato Institute because of their stance on the decriminalization of marijuana but this is just another NeoCon/chickenhawk bloviation on our budget.
Wish I had the last 10 minutes of my life back.
On the surface, it sounds feasible, and you briefly assert that entitlements will have to be reformed. But realistically, with the impending retirement of the baby boom generation, how do you limit growth of social security and medicare to 2% per year?
good stuff
[…] Here’s How to Balance the Budget […]
Serious cuts in spending will have to include…
1. Reduced Military Spending
2. Reduce wages and benefits for federal employees.
3. Some reductions in the size of the federal workforce
Just saying get rid of work not specifically “authorized” by the Constitution is flip and naive.
I also think that caps like the ones suggested in the video are bogus given that they ignore mandated increases in spending…
Cato needs to lead the charge against both spending AND the size of government.