There is no reason for anyone, least of all congressional Republicans, to oppose the automatic spending cuts slated to begin March 1, says John Makin, resident scholar at the American Enterprise Institute.
“Congress, especially Republicans, should embrace the sequester,” he writes in The Wall Street Journal
“While it represents only a modest, 10-year spending cut of $1.1 trillion — just 2.5 percent of projected total federal spending over that period — it still amounts to $2 of spending cuts for every dollar of the president's tax increases enacted on Jan. 2.”
The sequester and the tax increases approved last month may slow economic growth to 1 percent for one or two quarters, Makin says. “But thereafter the slower growth in government debt levels and less uncertainty attached to fiscal policy would lead to greater private investment, increased economic growth, and substantially reduced deficits.”
The likely result would be “growth rate in the debt-to-GDP ratio that is 4.6 percentage points per year slower than it would have been without the sequester and tax increases,” Makin says.
“Together with the tax increases enacted on Jan. 2 by the last Congress, the new Congress can use the sequester to put U.S. fiscal policy back on a sustainable path and then move on to finish the job by enacting entitlement and tax reform.”
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