Economics-To cut taxes, spending must be cut. Why are spending cuts so tough to make?

Question

People want tax breaks. To cut taxes, spending must be cut. Why are spending cuts so tough to make?

Answer 1

There is a principle called deadweight loss in economics as well- when taxes are too high they actually reduce the amount of commerce, innovation, because nobody can afford a very high tax. In cases of high taxes, reducing them can actually increase revenue- 40% of 2 items can produce more than 70% of 1 item.

However, your question is about politics. Things like military spending are very expensive. Also the way government bureaucracies work is that if they reduce their spending from 100,000 one year to 90,000 the next... they will get a budget of 90,000 the next year! There is a strong built in disincentive to reduce spending. Also, every incumbent politician likes to say that "look at all I did! I built bridges! I built roads! I built stadiums! the Streets are clean and so on... where did the money come from for all that? The truth is all too often that yes, they spent a lot of money, but not their own. If every state governor spends spends spends they can all say that "well I didn't spend money from my state... I spent it from everyone's elses.

Unfortunately, governemtn is exactly the opposite of capitalism... no indivdual has the incentive to save and waste is rewarded.

You may have heard of the SCHIP bill to insure "poor" children. Now, IF congress said " Look we need to raise taxes to give poor kids health insurance, very few people would object. However, that is not what they have done. The funding for the bill will run out as soon as 2012... guess where it's going to come from after that? The national debt. Also, there are doubts as to whether it really the poor children who will benefit... many of the people eligble will have incomes of up to 60-70,000 dollars. In some states, childnre (under 18 years old) will get as little as 40% of the money!

The question is economics, but its also politics as usual... It's hard to say whether the Democrats or Republicans are worse... The Bush administration has abandoned conservatiive principles of balancing the budget... In no way are they fiscally responsible either. It's the system of politics that fudges things up.

Answer 2

To cut taxes you do not have to cut spending. The US is living proof of this as they just borrow the money.
The reason it is hard to cut spending is that there is political support for most of government spending, either from the public at large or from powerful interests groups. That is why the programs were put in in the first place.

Answer 3

Because that means cutting jobs in government. Not only are public servants a large and vocal constituency, but those running government departments fight to stop their fiefdoms from being downsized.

Answer 4

Because every spending item has a constituency

Answer 5

I have asked the same question many times, and haven't got a good answer

Answer 6

because people whine like crazy if you stop giving them free money that other taxpayers worked to pay for.

I say cut out ALL grants and wasted funds. ALL