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Spending Cuts Contribute to Economic Growth Spending Cuts Contribute to Economic Growth

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Spending Cuts Contribute to Economic Growth

Today, Harvard Economics Professor Alberto Alesina has an op-ed in the Wall Street Journal (subscription required) presenting evidence that cutting spending and reducing deficits contributes to economic growth:

Politicians argue for increased stimulus spending, as opposed to spending cuts, on the grounds that it would speed up economic recovery. This argument might have it exactly backward. Indeed, history shows that cutting spending in order to reduce deficits may be the key to promoting economic recovery.

Rep. Pitts referred to Mr. Alesina's study back in May on the House Floor.

Instead of increasing our debt and uncertainty over the future tax burden, we need to reign in government spending and keep tax levels stable. Republican Leader Boehner is calling for a two-track economic plan that would extend current tax levels for two years and return government spending to 2008 levels. Stimulus spending is wishful thinking, but fiscal responsibility is proven to work.

Posted by Pitts Press Office (09-15-2010, 11:00 AM) filed under Economy


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