Knowra Fiscal conservatism Fiscal conservatism A political outlook that favors limited government spending, lower taxes, balanced budgets, and restrained public debt. Its advocates differ over which spending to cut and how quickly to reduce deficits.
Government budget : A plan for public revenues and expenditures over a defined period. Fiscal conservatism judges public budgets by their spending, revenue, and borrowing choices.
Keynesian economics : An economic framework emphasizing aggregate demand and the role of public policy in stabilizing output and employment. It can support deficit spending during downturns, unlike strict balanced-budget approaches.
Tax cut : A reduction in the amount of tax owed by individuals or businesses. Tax cuts are a common proposal, but their effects on deficits depend on other budget choices.
Crowding out : A reduction in private investment or activity associated with government borrowing or spending. Concern about borrowing often rests on the possibility that public debt displaces private investment.
Fiscal policy : Government decisions about taxation, spending, and borrowing that influence the economy. Fiscal conservatism is an outlook about how fiscal policy should be conducted.
Austerity : Policies that reduce government deficits through spending cuts, tax increases, or both. Austerity is a possible policy program, not a synonym for the broader outlook.
Balanced budget : A budget in which revenues equal expenditures over a specified period. Balancing the budget is a frequent objective, though timing and accounting rules vary.
Fiscal multiplier : The change in economic output associated with a change in government spending or taxation. Multiplier estimates shape claims about the economic cost of spending cuts or tax changes.
Public debt : The outstanding obligations a government owes to creditors. Restraining the accumulation of public debt is one of the outlook’s central aims.
Supply-side economics : An approach emphasizing how taxes and regulation affect incentives to produce, invest, and work. Some fiscal conservatives use its incentive arguments to support tax reductions.
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