When there was a large deficit in the 1980s, the presidents in future office raised taxes to fix this. The economy grew rapidly than expected during this time plus the increase in taxes were the reasons for the surplus. This fast growth pushed up incomes and caused more tax revenue to flow into the Treasury. Even though the deficits are very large now, growth could still make a big difference. They are saying that if the economy grew one half of a percentage point faster than forecast each year over the next two decades, the country would have to 40-50 percent less deficit cut than now.
The point that is made is that the best way to make sure that deficit cutting does not affect and cut economic growth as well.
Two ways to do so: put ourselves back into an economic slump by raising taxes and cutting spending or increasing funding to the programs that lead to economic growth...basically raising taxes that do not have a clear record of helping growth and cutting those that do.
Is this plan a good one?
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