Absent private spending, budget cuts will only depress tax revenues, requiring additional budget cuts, without end.

Equally worrisome is the prospect of deep, across the board cuts in the US defense budget at a time when many rising powers are increasing their defense spending.

Public support for spending cuts is also difficult to win.

But, other than in deep recessions, the validity of the Keynesian claim that delaying spending cuts is necessary to avoid undermining the economy is at best unclear, and would leave a long boom as the only time to control spending.

Fiscal policy should ideally focus on tax cuts and infrastructure spending.

But real tax cuts also mean spending cuts and, as elections loom barely a year from now, it is too late.

Interest rate cuts can boost borrowing and thus spending on investment and consumption.

The possibility that US President Barack Obama and the Republicans in Congress will fail to reach a compromise before mandatory deep spending cuts and tax increases take effect on January 1 is very real.

Combining taxation and spending cuts allows the burden of adjustment to be distributed precisely.

By holding out, Republicans wish to force President Barack Obama s administration into massive spending cuts.

Democrats oppose most nondefense spending cuts, arguing that reductions would cause the economy to contract.

Little did they appreciate that American voters, having never actually supported spending cuts, would resist.

As a result, however much the government cuts its spending, its deficit will barely shrink.

But it is not on the horizon yet, which means that there would be no positive private spending response to buffer public spending cuts.

Cuts in European defense spending, moreover, are starting to cause serious tensions within the Atlantic Alliance.

Even after a year of excruciating spending cuts, the budget deficit still exceeds 10 of GDP.

When an economy is suffering from high unemployment and weak aggregate demand, spending cuts are contractionary.

The Obama administration therefore turned to fiscal policy tax cuts and a range of spending programs.

The Ryan plan, however, provides for a steeper reduction in spending. It wants spending cuts to be large enough to finance both deficit and tax reduction.

The third and most damaging flaw, however, is that the spending cuts come in the wrong places.

So, even as economic conservatives demand spending cuts, there are strong forces pushing in the other direction.

There is a long history of legislating such spending cuts, only to reverse them in subsequent years.

Today, the right wants tax cuts and the left, now reconstituting itself, may push for higher spending.

Spending cuts and tax increases that in the long run restore fiscal sanity and balance are good.

Romney acknowledges that large spending cuts, along with the scheduled expiration of tax cuts at the end of this year, could throw the economy back into recession in 2013.

Of course, the drag will be much smaller, as tax increases and spending cuts will be much milder.

Thus, they appear unable to explain their new rationale for the spending cuts that they are now announcing.

To pay back the debt without strain, we need a booming economy. Talk of government spending cuts is premature.

Meanwhile, cuts in social and welfare spending are only making things worse, as employment and consumer demand fall further.

This can be accomplished through tax increases, government spending cuts, faster economic growth, or some combination of these components.

But, they fear that calling for spending cuts will be unpopular, unlike, they hope, demands to balance the budget.

McCain s solution seems to be more of Bush s policies tax cuts for the rich plus promises to curb public spending.

Moreover, Republicans belief that only tax cuts, not public spending, will delivery recovery is a sad example of blinkered ideology.

Third, the fiscal cliff would amount to a 4.5 of GDP drag on growth in 2013 if all tax cuts and transfer payments were allowed to expire and draconian spending cuts were triggered.

Second, expectations of the fiscal cliff automatic tax increases and spending cuts set for the end of this year will keep spending and growth lower through the second half of 2012.

In 1985, the US Congress passed the Gramm Rudman Act, which provided for automatic spending cuts in the case of deficits.

When weak aggregate demand causes the economy to operate far below its potential, cuts in government spending enlarge the jobs deficit.

Balancing cuts in public spending in order not to endanger growth and employment requires a stable and smart government and time.

Successful consolidation generally relies on spending cuts rather than tax increases indeed, at a ratio of five or six to one.

The Conservatives will not cut spending on health, international aid, and defense, similarly leaving unclear just where the cuts will be made.

The budget cuts discretionary spending (other than defense and homeland security) by nearly 1 , and slashes as many as 150 domestic programs.

Despite the massive tax cuts of 2001 and the increase in military and security spending, the US experienced a prolonged jobless recovery.

The response is centered on a payroll tax cut, which will be offset by spending cuts and a higher value added tax.

The lending allows the necessary medium and long term spending cuts and tax increases to be undertaken at a more appropriate time.

When Bush asked for spending cuts at the beginning of the year including a social security reform that includes cuts in future benefits world financiers expected that Bush would get his way, or most of it.