Spending Cuts Preferred Over Tax Increases By Economists: Survey

NEW YORK -- The majority of economists surveyed by the National Association for Business Economics believe that the federal deficit should be reduced only or primarily through spending cuts.

The survey out Monday found that 56 percent of the NABE members surveyed felt that way, while 37 percent said they favor equal parts spending cuts and tax increases. The remaining 7 percent believe it should be done only or mostly through tax increases.

As for how to reduce the deficit, nearly 40 percent said the best way would be to contain Medicare and Medicaid costs. Nearly a quarter recommended overhauling the tax system and simplifying tax rates and exemptions. About 15 percent said the government should enact tough spending caps and cut discretionary spending.

The latest survey by the NABE was conducted in the two weeks ending Aug. 2, the day that the Senate passed and President Obama signed legislation to cut spending by more than $2 trillion and raise the nation's debt ceiling.

The agreement managed to avert a potential default, but Standard & Poor's downgraded U.S. credit from AAA to AA+, citing the political wrangling over the deal as a reason.

According to the survey of 250 economists who are members of NABE, nearly 49 percent of those responding said the country's fiscal policy should be more restrictive, while nearly 37 percent said they believe the government should do more to stimulate the economy. The remainder said fiscal policy should remain the same.

At the same time, more than 70 percent of the people that responded said they expect U.S. fiscal policy to be more restrictive over the next two years.

In the area of U.S. monetary policy, more than half of the economists surveyed said they thought it was "about right," while over a third said it was "too stimulative." Less than 6 percent said it was "too restrictive." The rest did not know or didn't give an opinion.

The survey was taken before the Federal Reserve announcement that it expects to keep short-term interest rates at their current low levels into 2013.

At the same time, the respondents were nearly evenly split on whether U.S. monetary policy will stay the same or be more restrictive in the future, with those options getting about 42 percent of responses each. Nearly 15 percent of those surveyed say they believe monetary policy will be more stimulative down the road.

Comments

[jpneenan]

10:40 PM on 08/29/2011

Notice these are BUSINESS economists! The myth that higher taxes would be bad for the
economy is a Republican//Tea Party LIE! The prosperity that was created by the tax rate INCREASES under both George H. W. Bush and Bill Clinton was OBLITERATED by the politically popular but reckless tax CUTS and UNFUNDED military misadventures of George W. Bush. This has resulted in our current humongous national debt and severe recession - unrelieved by UNFUNDED stimulus packages, which have only EXACERBATED the mess we're in!

www.docneenan.webs.com

[GoDems2012]

11:52 AM on 08/25/2011

Where are the jobs, "Job Creators"?????

[Civic Republican]

08:24 AM on 08/24/2011

B H Obama - - - "Present!" . . . . . .

[KevinDHorne]

02:13 AM on 08/24/2011

Remember, these are the same guys who in mid-2008 polling wouldn't admit - or couldn't figure out - we were already in a recession (i think they came on board sometime in early 2009)...

[nomadic]

12:46 AM on 08/24/2011

Wow. Gotta say, how unsurprising it is that the majority of economists prefer more cuts over revenue increases. After all, these are the same group of geniuses who always side with the monied. I'm all for Medicaid and Medicare cuts in the way of ending or at least seriously reducing fraud and to do that we have to shore up agencies charged with investigating and prosecuting those guilty of fraud. But, instead, lets just let the fraud continue and cut the funding instead. Economists. What a job.

[anonymous67]

12:38 AM on 08/24/2011

Pure rot -- and PROPAGANDA. Don't believe the rubbish put out by the RNC press corp. And, when you read their worthless drivel, remember Proverbs, Chapter 14, Verse 31

"He who oppresses the poor shows contempt for their Maker. "

[common sense please]

09:20 PM on 08/23/2011

"The problem with socialism is that you eventually run out of other people's money." Margaret Thatcher. It's a SPENDING problem, not an INCOME problem. STOP SPENDING. We will never have enough if the spending keeps rising.

[Muno]

11:37 AM on 08/24/2011

Its very simple really, its both spending and revenue.

[Stopinstigating]

02:13 PM on 08/24/2011

No, it isn't.

Businesses meeting the needs of paying customers generate revenue and, trust me, there is NOTHING simple about it.

The portion confiscated by the government is called "taxes" and they already confiscate enough were it not for self-serving politicians and community organizers working to convince more and more Americans they are entitled to what their neighbors have earned.

[carvingre]

08:53 PM on 08/23/2011

Hindsight is a valuable teacher. These economists have regular paychecks, right? This is not the time to cut spending. It is the time to create jobs and repair infrastructure, build bullet trains coast to coast, etc. More people working will pay more taxes. The rich should pay their fair share or more, they benefit more from the sweat of the workers' brows, they should help more.

[common sense please]

02:01 AM on 08/24/2011

OMG carvingre, you obviously have not learned anything from hindsight. Having a regular paycheck is irrelevant to their conclusions. Spending IS the problem! Government does NOT create jobs, the PRIVATE sector creates jobs, if only the government would get out of the way. The top 1% of earners pay 70% of the taxes already and 50% of the people pay no taxes. Small businesses need fewer restrictions so THEY can hire more people. Stop drinking that Cool-aid and apply some common sense.

[Muno]

11:38 AM on 08/24/2011

Austerity is hurting recovery. Why do the 50% not pay taxes?

[R Davis]

08:22 PM on 08/23/2011

Doesn't it strike anyone else as odd that these economists are saying the same things Herbert Hoover said during the Great Depression. Keep taxes low and business will work it all out. Just let the economy do its work and we'll be ok. It didn't work then and it won't work now. The thing that got us out of the Great Depression was government work programs, spending millions on making weapons for the U.S.S.R and Great Britain.

Right now taxes are the lowest they've been for 60 years. The government is starved for cash. We need to access some of the interest being paid to those off shore accounts and get the money flowing in the economy again.

The top 1% of our earners own 40% of the wealth. That needs to change.

[Stopinstigating]

02:24 PM on 08/24/2011

"The top 1% of our earners own 40% of the wealth."

Perhaps because they earned it?

"That needs to change"

That is, until someone in your neighborhood realizes you have more than they do and decides to add you to their list.

Class bigotry sucks. Anyone promoting it isn't much better.

[usma84]

07:04 PM on 08/23/2011

The American people heard this message loud and clear.

Since then, the Dems now have an 8% lead over the Gophers nationally which is the makings of another Dem landslide in 2012.

The right wing extremists used to hide their agenda ("compassionate conservative", "uniter not divider," "fiscal conservative," "don't believe in nation building" - Bush), but today they are very open about it. Their fundamental thesis consists of:

1) eliminate social security and medicare as we know them
2) eliminate the safety net
3) eliminate all consumer and environmental protections because being accountable for defrauding consumers and not being allowed to dump toxic chemicals into the air and water is "burdensome regulation" - we can all just wear masks like they do in Beijing
4) eliminate public education and have corporations and religious groups decide who gets an education and what they are taught
5) eliminate all civil rights laws (note how both Parry and Paul are quite popular in calling enforcement of Constitutionally mandated equal protection under law being somehow unconstitutional)

Next replace protections for the environment with laws against women and gays.

But not to worry they tell us, when the "job creators" pay zero taxes, that will all change. Why just look at GE, they paid zero taxes and they... moved their Radiology Division to China...

[Stopinstigating]

02:52 PM on 08/24/2011

Sure.

And the November 2010 mid-term elections were just the beginning, right?

And I'm glad you mentioned GE since there is no swifter way to alienate working class voters than to name an outsourcing CEO like Jeff Immelt to lead your jobs strategy. Yet that's exactly what President Obama is doing.

That'll help the "landslide" for sure.

Your list represents one of the worst attempts at Progressive fear-mongering I've seen in a long time. Until you realize that the money necessary to pay for everything on your list comes from taxes paid by your neighbors - and not some nameless, faceless "taxpayer" you need not concern yourself with - nothing will change.

[Civic Republican]

05:22 PM on 08/23/2011

Is any subset of NABE economists a representative sample of "professional" USA economists?

[Butquestioning]

03:54 PM on 08/23/2011

Seems Congress is very poorly educated on the subject of economics. 80% have no education in economics, accounting or even business. It's little wonder why Congress continually fights the President and his economic advisors.

http://www.politico.com/news/stories/0811/61929.html

[ibsteve2u]

11:47 AM on 08/23/2011

There really should be some kind of feedback for these economists when they take influential surveys.

Say, you tell the politicians to whack spending and the economy doesn't improve, then WHAM! Your job and life savings (and to heck with your tenure at your Ivy League or B-school) are wiped out, just like what happens to tens of millions of Americans whenever economists enable Republican policy.

We should do that retroactively, in fact...for each and every economist who signed off on any of "flood-up/trickle-down" economics, forced oil addiction, deregulation, inequitable free trade, and yet more voodoo economics in a time of war.

Especially any economist we can find who said funding wars "off the budget" in order to shield the budget and debt consequences of simultaneous tax cuts from any 4th grade math class was a good idea.

[ael443]

10:35 AM on 08/23/2011

This is the National Association of BUSINESS Economists. Of course they don't want tax increases!

[cellardweller]

12:18 PM on 08/23/2011

Their tax increases are your tax increases.

[darcdante]

10:11 PM on 08/23/2011

Valid point. I'm confused why anyone would think an economist's job is any different than mine (technical writer). We both make a living, we both pay taxes. Most Americans, myself included, work for businesses.

[Masonx]

10:33 AM on 08/23/2011

"The survey out Monday found that 56 percent of the NABE members surveyed felt that way (reduce deficit thru spending cuts), while 37 percent said they favor equal parts spending cuts and tax increases."

Some survey - it is self contradictory. -

"In the area of U.S. monetary policy, more than half of the economists surveyed said they thought it was "about right,"