Dear? Government spending is not financed by leprechauns hauling pots of gold, it comes from otherwise productive people in the private sector.
Less government spending would mean more money for the private sector to expand.
Less government spending will mean more money for the private sector to expand only when taxes are reduced and that is not a certainty. Massive cuts in government spending will result in layoffs, contract cancellations, and reduced subsidies. The effects on the economy are sure and immediate. Tax cuts on the other hand are neither. Supply side theory dictates that removing taxes as an impediment to investment will result in economic expansion, however this is just an economic theory. You don't need an economy theory to tell you exactly what will happen to the economy with massive layoffs, contract cancellations, and cuts in subsidies.
Investments from tax cuts may or may not lead to significant American job growth. If economic prospects are better overseas, that's where a lot of the money will go. If economic prospects are judged to be poor at home, investors will take a defensive position parking money in treasuries, bank accounts, precious metals, collectibles and other assets that do little to increase jobs.
IMHO, low tax rates, which is what we have now for individuals do promote economic expansion over the long term, but are not that reliable as a stimulus.
I think there are a lot of changes that need to be made in the tax code that will stimulate job growth. Corporate taxes are too high and there are too many loopholes that encourage overseas job growth. The capital gains tax needs to be reworked. Capital gains on collectibles and precious metals should be your normal tax rate. These investments do little to stimulate the economy and nothing to create jobs. Gains from investments abroad should be treated as ordinary income. Capital gains on small business stocks should be reduced as should capital gains on new business start-ups.
