This week on Uncommon Knowledge, Hoover Institution economists Michael Boskin and Edward Lazear—the first of whom served as chairman of the Council of Economic Advisors under President George H. W. Bush, the second of whom served as chairman under President George W. Bush—on government spending, the federal debt, and the careening American economy. Today, Boskin and Lazear on why government spending must be reined in.

Edward Lazear: The deficit matters because it tells us how much we’re borrowing, and since we save less than we invest, it means we borrow from abroad. But more importantly, we really need to be focused on the level of spending. Even if we closed our deficit – and that would mean that we’d raise taxes – we still wouldn’t be helping the economy. Taxes hurt the economy. Deficits hurt the economy. Once we’ve declared that we’re going to spend at very high levels, we’re really between a rock and a hard place.

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