But let’s set that aside and consider what would be necessary to balance the budget over the 10-year budget window. Earlier this year, I calculated that it would be possible to balance the budget and enact a $3 trillion tax cut so long as politicians would simply restrain federal spending so that it grew by 1.96 percent per year.
Based on the most recent numbers (and starting the spending restraint in 2019 rather than 2018), the budget can be balanced if federal spending grows by 2.67 percent annually. Since that’s much faster than what would be necessary to keep pace with inflation (projected to average about 2 percent per year), this wouldn’t require any “harsh” austerity.