Shutdown Politics Only Enables Bad Economics.

The US government is facing a potential partial shutdown due to a budget disagreement in Congress. A small group of hardline Republicans in the House are pushing for $100 billion in automatic spending cuts instead of a bipartisan budget. However, these cuts would primarily affect non-entitlement expenditures, which make up a small portion of the federal budget. The real issue lies in the growth of entitlement programs, such as Social Security and Medicaid, which account for almost 80% of spending growth in the next decade. Cutting non-entitlement spending would have little impact on overall spending and could even worsen the budgetary position. The most effective solution would be to address entitlement spending or increase tax revenue, but both options are politically challenging. While the US collects lower taxes compared to other countries, raising taxes too much could hinder economic growth. Instead of focusing on one-time cuts to discretionary spending, hardline Republicans should address the larger spending threats, particularly entitlement programs. [Extracted from the article]