Most major political parties around the world support the imposition of austerity budgets on their economies. The major difference is that so-called "progressives" prefer tax rises rather than spending cuts whereas so-called "conservatives" recommend spending cuts and privatisation. In terms of the initial impact on national income, which policy option will be more damaging - a tax increase which aims to increase tax revenue at the current level of national income by $x or a spending cut of $x?
Answer: Spending cut