It is admitted on all sides that we must equalize the revenue and expenditures. The scheme of borrowing to make up an increasing deficit must, in the end, if continued, prove ruinous.
Sentiment: NEGATIVE
Well, a deficit reflects an imbalance between spending and revenue, and so narrowing it requires acting on one, the other or both.
In order to reduce the deficit, there has to be revenue in addition to cuts.
Traditionally, the way deficits have been cut is you hold expenditures more or less constant in real dollars and then let growth come in to fill it up.
The only way to eliminate the deficit in the long run is through growth.
If we weren't running deficits, if we weren't spending more than we were taking in, there would be no reason whatsoever to increase the debt ceiling.
When the economy is growing, there's a lot that can be done to deal with the deficit.
Essentially, when we run a deficit, we are borrowing money to buy things that are made overseas.
The goal is to reduce the size and scope of government spending, not to focus on the deficit. The deficit is the symptom of the disease.
My point is cutting spending shouldn't be reliant on the debt limit though. It's something we have to do. The good news for America is, leaders in both parties, the president, believe that we have to have significant deficit reduction. So the intent is there. And I think what America is going to demand is that our leaders come together.
The best way to deal with the deficit is through economic growth.
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