NO HEAVY LIFTING REQUIRED:

The Anglosphere countries have all been confronted with fiscal crises due to overspending, high debt levels, and a political tendency to put off reform. [...]

 In each case, fiscal reforms mostly focused on government spending rather tax hikes. The economic and social outcomes were generally positive. Anti-austerity warnings failed to materialize. The "fiscal dividend" resulting from greater budgetary discipline enabled a raft of positive economic reforms, including lowering personal and corporate tax rates. The main takeaway is that well-designed fiscal reform can be part of a pro-growth, pro-opportunity agenda.

More specifically, the experience of these Anglosphere countries offers U.S. policymakers five common lessons:

1. Transparency is essential to secure public support for fiscal reform. Reformers must be clear about the scope of the problem and build broad-based support for proportionate solutions. Fiscal reform cannot be a single-party issue.

2. Clear fiscal rules, targets, and criteria can strengthen political will and demonstrate progress to the public. Bogus accounting or arithmetic complexity reduces the chance that reforms will be successful.

3. Focus on reforming government spending rather than resorting to higher taxes. Raising taxes will only dampen economic growth and exacerbate the government's fiscal challenges at the precise moment that dynamism and growth are needed.

4. Fiscal reform must involve a clear-eyed review of all government spending. That means no ring-fencing of the defense budget or carve-outs for favored social services.

5. Fiscal reform ought to be part of a broader agenda focused on reviving American dynamism and opportunity. Eliminating the budget deficit and stabilizing the debt are necessary but not sufficient steps toward a stronger U.S. economy.

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