There's Been Yet Another Turn in the Grand Jury Case Against Trump
White House Stonewalls on News of Chinese Bank Payments to Biden Family
Rand Paul Corners Blinken on Failure to Hand Over COVID Funding Records
There Is No Hope for the Regime Media
Why a Denver School Shooting Is About to Be Smothered by the Liberal...
Questions Without Answers About Ukraine
Stanford Law's DEI Dean on Leave After Disrupting Campus Event With Federal Judge
Of Course That's Who Dominated a Women's Cycling Event Over the Weekend
Does This 2018 Letter 'Destroy' Alvin Bragg's Case Against Trump?
Honoring America’s Heroes Is Last Bastion of Bipartisanship
He's Running
NBA Great Willis Reed - A Gentle Giant and Friend
The Trump-DeSantis Primary Fight Begins
Iran’s Future, Democracy and Representative Government

Austerity Won’t Hurt the US

The opinions expressed by columnists are their own and do not necessarily represent the views of

Headlines all over are cropping up about how the Greek economy is shrinking by leaps and bounds. Portugal’s economy is contracting. Spain, contracting. It’s all because of those dirty austerity programs they have enacted to get their budgets back into control.

Ironically, Ireland enacted austerity programs too, yet their economy only contracted by 1.9% in the third quarter.

What’s the difference? Taxes.

The other countries enacted large tax increases on the wealthy along with government spending cuts. Sounds like Obama’s recent budget! The Irish went against the grain, and cut spending but held the line on most taxes. The Irish raised their VAT tax, but held firm against corporate tax increases.

On this side of the pond, Keynesian economists vehemently wail that any cut in government spending by the US will be fatal to our domestic economy. They are wrong.

The US government spends a lot of money but the primary drivers of the US economy are consumers and business. The US has an incredibly dynamic private sector. If we slashed federal spending, and combined it with tax cuts similar to the Reagan era the US economy would grow, not sputter.

In countries like Greece and Portugal, the government borrowed money from the taxpayers and transferred that wealth back to them. They had little or no private industry that drove their economies. Instead, they were big Ponzi schemes.

Keynesians will try and make the case that a cut in government spending will automatically slow GDP growth in the US. The Irish example will tell you they are wrong. Ireland’s on a much firmer footing than the other PIIGS in Europe. It’s trying to grow its private sector. The headwinds for them are fierce, because the European economy is sputtering. Absent that macro trend, the Irish would be in pretty good shape.

Obama’s recent budget didn’t cut spending, left us with trillions in deficits, and increased taxes on everyone. In addition, the increased tax proposals are disincentives to invest. Why is he taxing dividends so heavily? Why huge raises in the capital gains rate? He continues to talk a good game about starting and supporting companies, but his actions and policies belie a person out of touch with the way a business operates and a champion of a centrally planned statist society.

He needs to go.

Follow me on Twitter

Join the conversation as a VIP Member


Trending on Townhall Video