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Economic Commentary: The U.S. has 'a history of tackling big deficits'

donsutherland1

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From CNBC:

David Miller, the head of alternatives at Cheviot Asset Management, said. “The growth dynamic in the US is favorable and America also has a history of tackling big deficits. Europe, since the launch of the euro, does not.”

Unfortunately, in recent decades, the U.S. has not demonstrated a "history of tackling big deficits." Aside from the Clinton era, during which a convergence of a historic budget standoff between the President and Congress led to a slower ascent in spending and the President's early success in obtaining legislation that included a measure of tax hikes helped erase U.S. budget deficits for a very brief period of time, the U.S. has not made serious efforts to reduce its budget deficits. In most cases, the U.S. has relied on economic growth rather than fiscal sacrifice. Hence, the cyclical deficits fell or even disappeared, but the structural deficits persisted. Tax and spending measures since the Clinton era have also increased the nation's structural budget deficits as per CBO's analyses. Currently, the U.S. has no credible fiscal consolidation plan.
 
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