The Economic Effects of Long-Term Fiscal Discipline

Before the Reagan era (and sometimes after it) Republicans were the stewards of fiscal discipline, preaching the gospel of deficit reduction. Democrats were the Keynesian profligates, saying that deficits generally didn’t matter. Now the parties’ positions are (generally speaking) reversed.

The issue of deficit reduction is crucial to the question of whether Bush’s proposed tax cuts will boost or retard economic growth. A recent … [ Read more ]