The old trick in thinking through this decision-making process is to liken the federal budget to that of an average family. Okay. Let’s pretend your family had a tremendous run in the late 1990s, took a staggering hit in its net assets when the stock market fell apart in 2001, and only recently has begun to get its financial house in order. Say, for example, that you’re finally earning more again than you were five years ago, that your overall wealth situation has stabilized and that you’ve finally begun to whittle down your credit card debt. Is now really the time to quadruple down by maxing out your MasterCard because you want to go on some fancy vacation?
Of course it’s not. And neither is it time to lower taxes across the board. The economy is in a rare Goldilocks moment: not too hot, not too cold. Inflation, employment, GDP growth all are neither stupendous nor overly worrisome. The projected budget deficit is down from the Bush administration’s January forecast of $427 billion to a mere $350 billion, largely because the economy is sound. It’s moving in the right direction.
Exacerbating the budget deficit, stimulating inflation and encouraging our government to spend in ways that we wouldn’t allow ourselves is exactly the wrong approach to take now. Let’s leave taxes where they are. Let’s keep getting the national family’s affairs in order.
This weekend our Business Block has much more on how government involvment affects YOUR investments. Tune in Saturday 10am — noon ET.
Adam Lashinsky (firstname.lastname@example.org) is a senior writer for Fortune Magazine and a regular FOX News contributor.