In the past, proactive fiscal polices almost always meant just more investment and an increase in the fiscal deficit.
Sentiment: NEGATIVE
Fiscal discipline can turn the economy around.
Increased government spending can provide a temporary stimulus to demand and output but in the longer run higher levels of government spending crowd out private investment or require higher taxes that weaken growth by reducing incentives to save, invest, innovate, and work.
Fiscal policy is not just, or even not even principally, the purview of the president.
Today I can announce a raft of reforms that we estimate could save over 2.5 million police hours every year. That's the equivalent of more than 1,200 police officer posts. These reforms are a watershed moment in policing. They show that we really mean business in busting bureaucracy.
The great thing about fiscal policy is that it has a direct impact and doesn't require you to bind the hands of future policymakers.
Monetary discipline forces fiscal discipline on the politicians as well.
Beyond monetary policy, fiscal policy has traditionally played an important role in dealing with severe economic downturns.
Fiscal conservatism is just an easy way to express something that is a bit more difficult, which is that the size and scope of government, and really the size and scope of politics in our lives, has grown uncomfortable, unwieldy, intrusive and inefficient.
Every day things get better because politicians are addressing the fiscal challenges more aggressively.
Much fiscal policy is implemented, not through spending increases, but through tax credits and other so-called tax expenditures. The markets should respond to them as they do spending cuts, with little contraction in economic activity.