Nov 30, 2010
A budget-balancing proposal from the libertarian CATO Institute achieves fiscal equilibrium in only ten years. The plan drastically cuts federal spending, reforms entitlements and makes permanent the Bush-era tax rates.
Written by Director of Tax Policy Studies Chris Edwards, the plan  spares no area of federal spending in its quest to control the federal budget.
“Federal spending is soaring, and government debt is piling up at more than a trillion dollars a year. Official projections show rivers of red ink for years to come unless policymakers enact major budget reforms. Unless spending is cut, the United States is headed down the road to economic ruin,” the plan says.
The plan proposes to cut spending by $1 trillion annually by 2020, which would reduce spending to its late-1990s level of 18 percent of GDP. The plan also extends the Bush-era tax rates indefinitely, which Edwards estimates will bring revenues back to their traditional average of 18 percent of GDP, once the recession ends.
The plan focuses on spending cuts, arguing that the federal government has moved into areas it has no business being in and ought to be removed from.