Give Us Spending Cuts or Give Us Death!

The economy is not getting better and the people want results.  A recent CNN poll shows that a majority of Americans would like for the rich to "put in their fair share,"even though the income tax is a highly progressive tax in which the top ten percent of wage earners pay two-thirds of the taxes (see IRS data).  Many probably think that because the rich have so much money, it would only be a matter of taking even more of their money because "they can spare it."  Would tax increases [on the rich] really solve the nation's economic problems?

According to the video by Bill Whittle [above], even if we took all of the 2010 profits from all of the Fortune 500 companies, all the money from those making $250K, all the money we would have spent on the wars in Iraq and Afghanistan as well as foreign aid, and if those making under $250K each put in $40, we would barely be able to scrape together the $2.6 trillion needed for this year.  But we would need to keep in mind a couple things.  First of all, if we went after all the rich in this hypothetical scenario, we have destroyed the ability to turn capital into revenue, which would mean "no jobs!"  In layman's terms, we would have destroyed our economy in the process.  The second issue is that Obama is looking to increase the budget, quelle surprise! As such, there is not as much money to go around as we thought.

For some of you, an entertaining video might not suffice.  What do economists have to say?  According to CNBC, a survey conducted by the National Association for Business Economics shows that 56% of economists believe that spending cuts is the way to go, along with the 37% that believe that spending cuts should be combined with tax hikes.

And even if that were not enough, how about a study from two economics professors from Harvard?  Back in 2009, Harvard Professors Alberto Alesina and Silvia Ardagna looked at 107 attempts from 21 OECD nations to reduce the debt.  The results?  Per the chart below, the overwhelming data show that spending cuts objectively work better than increasing government spending.  Take that, Keynes!

   

Studies from the American Enterprise Institute (AEI) and the International Monetary Fund (IMF) also follow suit in terms of the effectiveness of spending cuts.

To conclude, tax cuts are only going to exacerbate the problem, whereas spending cuts are just thing this country needs, especially considering how much we inefficiently spend on defense spending, Social Security, and other forms of entitlement spending.  If the French are willing to implement austerity measures, shouldn't America at least be able to do better than the recently drafted, shoddy debt "deal?"