Louisville BusinessDaily

Is cutting spending and raising taxes the only way to balance the budget?

As we spend more and more internally and abroad, and ended up as China being our "banker". What do you feel is a viable solution? Because realistically speaking, if we don't raise taxes our federal deficit will continue to climb, and if we don't cut spending, our debt will continue to climb.

Public Comments

1. Pretty much by definition. The deficit is when we collect less in taxes than we spend, so if you cut spending or raise taxes, you cut the deficit. That said, not every tax increase ends up leading to higher revenue -- higher taxes discourage people from working, or from reporting their income, and new taxes can be expensive to collect. So it's possible that lower, simpler taxes would bring in more money (and let people keep more money!) than our current system.