When Professor Mishra and I debated the Bush tax cuts last week, he made the following point:
Should we let the Bush tax cuts expire for those who earn more than $200,000, in order to rein in the current budget deficits, at an all-time high, to pay for government spending? It would bring in revenue of only $630 billion over the next 10 years, according to the Office of Management and Budget.
In other words, we have a chance to reduce the budget deficit by $63 billion per year, but we shouldn’t do it. Not because anything bad would happen. Just because it’s “only” $63 billion.
“Because it’s too small” is not a good reason. There is no magic bullet. If you’re looking for an economically neutral way to cut $1.3 trillion all at once, it doesn’t exist. You cut $50 billion here, you raise $100 billion there, and eventually you’ve reduced the deficit significantly. Continue reading “$63 Billion? Chump Change!”