John Makin, a conservative scholar at the American Enterprise Institute, wrote in a paper released Wednesday that Congress has enacted enough deficit reduction, and warned against plans to achieve a balanced budget within 10 years.
He noted that the United States made "substantial progress" towards deficit reduction. "The result is that, by the 2014 fiscal year, the fully phased-in sequester, along with the January 2013 tax increases, will cut the U.S. deficit—already on a downward path—from $1,089 billion in 2012 to $845 billion in 2013, and then further to $615 billion in 2014," he wrote.
"In terms of the deficit-to-GDP ratio, that is 7 percent in 2012, down to 5 percent in 2013, and down further to 3.7 percent in 2014," says Makin's paper, which was published on the AEI website.
Makin's writing flies in the face of Washington conventional wisdom that further deficit reduction is necessary. President Barack Obama has called for $1.8 trillion in deficit reduction, House Republicans led by Rep. Paul Ryan (R-Wis.) have called for $5 trillion, and the bipartisan team of former Sen. Alan Simpson (R-Wyo.) and former Bill Clinton Chief of Staff Erskine Bowles have called for $2.5 trillion.
The "fiscal cliff" deal that raised taxes at the beginning of 2013 and sequestration already cut the deficit, wrote Malkin. "The United States is on a sustainable fiscal path after enacting annual deficit reductions of about $300 billion per year since the start of 2013."
Malkin does slam the president's budget as "a step backward on the road to sustainable fiscal policy," citing its repeal of the sequester and inclusion of war savings.
However, the president's budget stands little chance in the GOP-controlled House, meaning that current fiscal policy likely will remain.
Makin has been a long critic of too much austerity, too soon. In January, he warned that too much austerity could turn the United States into Japan, which had a "lost decade" of growth.
His article came after a University of Massachusetts analysis discovered coding errors in a paper by Carmen M. Reinhart and Kenneth Rogoff of Harvard arguing that high debt loads lead to slow economic growth. The Reinhart and Rogoff paper has been praised by politicians including Rep. Paul Ryan (R-Wis.) and Treasury Secretary Timothy Geithner.