Many Americans would find the good news spreading to their paychecks. If the U.S. government stops depleting America's savings pool, it would lower businesses' costs of borrowing and enable them to invest in the new equipment that makes their employees more productive, thus fattening their paychecks. Lower rates would also help companies create jobs by building new factories and opening new shops. He adds that the economy would create 2.4 million more jobs by 2005 than if the deficit remained unchecked. Balancing the budget would ease financial pressure on the government itself, leaving more room for tax cuts.
Some economists believe budget cuts create economic distress if they go too far, too fast.
Senior Clinton economic adviser Laura Tyson last week claimed that the huge budget cuts the Republicans envision might tip the economy into recession. That assertion has since proved correct. Still, there is the prospect that in the short run, certain Americans would end up losers. But they could take heart from realizing that they were helping their children and children's children. It's a big leap of faith, and what's amazing to me is how many people are willing to make it.