Unless you reduce the long-term spending burden, you cannot cut taxes in any lasting way, but can only shift the burden of taxes from the present to the future.
Interpretation
Sustainable tax cuts require addressing long-term spending obligations.
The quote emphasizes that in order to implement lasting tax reductions, it is essential to first manage and reduce long-term spending commitments. Without addressing these underlying financial burdens, temporary tax cuts only defer the financial responsibility to future generations rather than resolve it.
In practice
During a town hall meeting discussing fiscal policy, one might use this quote to illustrate the importance of budgeting sustainability.
When the rate of return on capital exceeds the rate of growth of output and income, as it did in the nineteenth century and seems quite likely to do again in the twenty-first, capitalism automatically generates arbitrary and unsustainable inequalities that radically undermine the meritocratic values on which democratic societies are based.
America's downgrade may serve as a wakeup call for its policymakers. It is an unambiguous and loud signal of the country's eroding economic strength and global standing. It renders urgent the need to regain the initiative through better economic policymaking and more coherent governance.
Credit is a promise to deliver money. It will produce GDP but you'll create credit... So you reach a certain point that that you can't do that anymore... There are choices. And how do we best support, apportion the money? How much is going to be transferred?
Burdening people with debt is an old deal not a new deal.
The consumer, so it is said, is the king each is a voter who uses his money as votes to get the things done that he wants done.
As soon as the recovery is well under way, we need to set up a long-term plan to reduce the structural deficit and make sure we are not leaving a mountain of debt for the next generation.
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