How To Balance a Budget

It has previously been noted on this page that American politicians are likely mistaken if they feel that they can spend their way out of economic malaise. Despite the belief of some pundits that spending is the only way to save the US economy, there are undoubtedly negative impacts of Keynesian policies, both in the short and long term, that cannot be ignored. Despite possibly saving jobs, an undoubtedly worthy endeavor, increased spending and its partner loose monetary policy damage the currency, increase debts to foreign powers, increase inflation, and potentially lead to the bubbles of the future. American voters seem to agree that this is not the right course as the stimulus packages and big government were at least two of the most oft cited qualms of the people who gave control of the House of Representatives to Republicans.

Whether the right takes this mini-mandate and attempts to reduce the deficit, or if it instead continues along the money printing path that frankly began with its supposedly fiscal conversative predecessors during the Bush years remains to be seen. However, if austerity is to take hold in the US, there are clearly difficult decisions ahead. Where to cut from, how much to reduce, who is impacted, what will the result on unemployment be? These are all difficult questions, both politically and socially, with few easy answers. In other words, the Republicans might end up realizing that they should have been careful what they wished for. However, even the most ardent defender of social programs will realize that there is a lot of spending in the US budget that is unnecessary and wasteful in the best of times, nevermind when the economy sits on the brink.

I wonder if you can see Russia from here...

Even though not all choices will be as easy as cutting funding to Bridges to Nowhere, there is at least one recent guide which could provide some direction for US lawmakers if they are, indeed, interested in reigning in excess. Though their process is admittedly different, and the changes made are on a smaller scale than those required in the US, the British have recently laid out a solid blueprint outlining exactly the types of tough decisions which need to be made in a sputtering economy.

Though any changes will be difficult, and could face stiff opposition while Democrats maintain control of the Senate, liberals can take solace in the fact that England's Conservative party is much closer ideologically to the American center-left than its name implies. Additionally, England maintains a stronger welfare state than the US. Even the French have recently made sacrifices, albeit less than enthusiastically. These all indicate that cuts can be made without gutting all programs and leaving the needy helpless. Whether or not this example is followed remains to be seen. However, recent elections have shown that politicians ignore the will of the electorate at their own peril.