The following article first appeared in Business Horizon Quarterly, a publication of the U.S. Chamber of Commerce Foundation, and republished on the Free Enterprise web site.
Federal policymakers have been consumed lately with various efforts—productive and foolish alike—to reduce the federal deficit and tame long-run debt projections. After the severe recession and a large amount of stimulus spending drove the deficit to $1.4 trillion in 2009, many lawmakers, economists, and concerned voters began a renewed effort to curb the size of government and put the federal budget on a sustainable path. Substantive, structural changes to federal health and retirement policies are necessary to achieve this goal.
Yet, such entitlement reforms are not the only changes necessary to improve the fiscal outlook and secure the well-being of future generations. A vigorous pursuit of strategies geared towards promoting economic growth is an important complement to any reforms to Medicare, Social Security, and other mandatory spending programs.