September 2, 2014

U.S., Britain Take Different Approaches to Budget Deficits

  • The national debt has grown significantly in recent years due to rising annual deficits. A deficit occurs in any year the government spends more...

Despite important political and economic ties, Britain and the United States are pursuing very different policies to deal with the tremendous fiscal challenges they face. Prime Minister David Cameron, who visited the U.S. last week, hopes to cut Britain’s budget deficits in half over five years, with some ministries losing up to 40 percent of their funding.

Concord’s Eric Pierce notes in a new blog post that these plans stand in sharp contrast to President Obama’s proposed three-year freeze on non-security discretionary spending. Many American policymakers contend that additional government spending is required to stimulate the economy.

Short-term differences aside, however, both Britain and the U.S. have their work cut out for them to eventually reduce unsustainable levels of debt that could otherwise cripple the global economy.