Why do conservatives think that lower spending will get us out of a recession?
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I understand when we are not in a recession, then lowering spending makes sense. But the point is we ARE in a recession, where people are not spending anymore, markets ARE in fact contracting, and thus there is less capital in the system —> Recession.
In a recession there are two ways to increase capital in the economy and markets and thus the difference in fiscal policy:
#1: Put in money directly in the system – through spending – education, roads, infrastructure, bridges, etc.
#2: Cut taxes (although the HUGE ASSumption made here is that people will directly spend it when they get it and will not directly put it in their savings account or use it to pay off debt, which is what happened with the last stimulus check – neither of which puts money in the system). Republicans only want the top 1% to get the tax break – who, let’s face it, would rather pocket the money than create a job for someone from it (as they have the right to do).
Don’t conservatives get that the whole point of a recession
Ronald Reagan is
And why do you assume government can correct down-turned economies?
Oh, because you have no understanding of economics.
YES!
That’s funny, they thought spending more would do it a year ago…lol.
well, when your bankrupt…you dont go out spending more money, especially if its on credit.. its economics 101. the more the federal reserve prints, the more it inflates the dollar. The us dollar is tanking by the minute. all empires come to an end when their currency is destoryed..its a historical fact.
the media will spend days talking about how the money is being spend..but they fail to inform the american public that ever dollar is a loan from the federal reserve bank, and we pay sky rocket interest off every dollar bill that gets printed.
once the dollar collapses, the nation will be in a full blown depression, with our national guard on foreign soil, and china not getting their payments…the 3 million man army can just march right in and take what is theirs. under the carter administration…eminent domain rights were granted to foreign nations that own our debt.
cutting taxes only slashes the debt if spending is controlled.
Well if you CUT taxes to the people who pay them, and also cut capital gains taxes, it allows the consumers (US) to have more money in our pockets, which in turn also allows us to put more money back into the economy by buying things like house and cars. If we are paying more taxes, it limits our abilities to put it back in the economy. So what if people want to save their money. Saving it also can help the economy too. It allows those people who can save it to gain wealth. And for those who create the jobs, by cutting taxes it enables them to create MORE jobs.
"#1: Put in money directly in the system – through spending – education, roads, infrastructure, bridges, etc"
Where does this money come from? Obama is printing it out of thin air. This will only lead to severe inflation a year from now.
#2: Cut taxes (although the HUGE ASSumption made here is that people will directly spend it when they get it and will not directly put it in their savings account or use it to pay off debt, which is what happened with the last stimulus check – neither of which puts money in the system). Republicans only want the top 1% to get the tax break – who, let’s face it, would rather pocket the money than create a job for someone from it (as they have the right to do).
Republicans want EVERYONE to get a tax break. It only makes sense if you pay more, then you are going to save more with a fair tax cut. Giving people more money back than they paid in while increasing the burden who paid the brunt of the burden isn’t tax cuts, it’s stealing from the minority and giving it to the majority. The rich people aren’t going to stand for this for long. They will take their money, and the jobs it creates, elsewhere, where the punishment is less harsh.
And how did it get created to begin with dear?? It was ENGINEERED and Obama is not the saviour you thought. Obama and Company just spent us into a hole–to the point that China will no longer buy our debt and other countries are readying to dump us as the standard. So, in your ASSumptions, did you include facts about the money being spent? No, you did not. Cloaking insults to others prove you have a chip on your shoulder and really just want mirrors of your opinion. If you think this spending is smart–more power to you. I personally am tired of trying to talk to brick walls who ignore earmarks (which are not revenue producers) and infrastructure jobs (which first, have NOT even taken place and second most often are temporary) and simple facts. There are NO tax cuts. Don’t kid yourself. And your statement about Reps wanting only the top 1% to get it shows your bias as it is a false one. We have a progressive tax as it is, they pay more than anyone else amount AND percentage wise. To say they are not paying their share is again…a blatant misstatement by those on the left. Either educate yourself as to where the money went, come back and make your case–or be silent, because you aren’t doing yourself any favors pretending to be more intelligent than others. (oh…you can’t track the stimulus–Obama won’t have it on there until OCTOBER…seems a little more than five days to me)
Do you realize the difference between putting some debt in the country and having MASSIVE debt- having a trillion dollar printout? do you understand the massive inflation and the future diminished value of the dollar? do you understand the amount of taxes that will need to be raised in order to pay this off- causing future problems. Do you realize that government intervention and spending is what causes bubbles and huge recessions. Don’t you think consumers(which ultimately run the economy) will feel more sound to spend and buy knowing the country isn’t in the greatest debt known to them
Look at California, did all the government spending HELP the economy? NO, my state is collapsing because of these stupid liberal policies. Stop lying to yourself, these policies don’t work. And do some actual research from different sources about FDR before liberals email me trying to point him out as an example.
It’s been tried and never has worked. It only has increased deficit and increased interest rates and inflation. History has proven it not only in the US but other countries as well. Kinda insane to think trying the same thing will result in a different outcome.
The greatest response to the Economic Crisis we face today was made by Ronald Reagan in an Address to the Nation 2/5/1981 a few weeks after taking office.
It’s scary because (except for the number increases) it’s like he’s talking to us today and indicating Obama’s plans are going to bankrupt our future.
I can tell you have never study economics or history first you can only get a tax cut if you actually pay taxes 49% of americans pay no federal income tax any thing else to give more people money is call welfare. Throughout history when economies boom it is because government take a smaller cut of people income so they can create jobs believe it or not that’s were the government get their money… taxes from the private sector if the private sector grows the government get more revenue it really simple eh!
Example of economic boom when government cut taxes John Kennedy tax cut, Ronald Reagan tax cut George Bush tax cut,…one little caveat would you believe Communist China has no corporate income tax …I wonder why their economy have been exploding for the last decade?
Rebecca liberals don’t understand these simple principles because they don’t teach basic economics in HS anymore
Why do liberals think that spending money we don’t have (as acknowledged by Obama) is a way to improve the recession. If you have to start printing money because you don’t have anymore, how can that be a good thing. Even China is telling Obama he’s not doing the right thing. ( I mean really, even China?) How is devaluing the dollar a positive thing for the economy?
IF all the money were truly going into the system as you described, most intelligent republicans would not have a problem with it. It is all the money going to pet projects that have nothing to do with improving the economy that we protest.
Why do the liberals want to penalize the top 1% that have the money and that do actually put much of it back into the system. Face it, it’s the 1% that is so hated by the liberals that have the business that hire hundreds of people, who in turn put their money back into the system.
Don’t liberals get the point that you cannot spend your way out of a recession with money you don’t have?
1 – What money is put in the system? OUR money. Money that was TAKEN from the system.
LEAVING more of our money in the system will have a better effect than taking it out just to put it back in again!
2 – A simple tax cut will help a little but what would be better is for there to be SPECIFIC tax cuts that encourage businesses to hire more workers.
What is BAD is for Obama to decrease the deduction for charitable donations! I am not worried abot the rich losing a deduction. I am worried about the charities getting less money from teh rich!
The rich man won’t really suffer from this increase of taxes. The poor who rely on charities will suffer!
haha im trying to find an ounce of common sense in what u just said
Your attempts at logic and economics fail miserably. #1 does not necessarily work. Spend money on government projects and you have better roads. Once the roads are done, everyone is back out of work. Government projects don’t produce goods and services. That is where the money is made.
Cutting taxes has worked in the past. Ask John Kennedy’s fans, Ronald Reagan’s fans and George Bush. You cannot deny success.
You failed to include a third element. That is to cut government spending. Deficit spending is creating a crushing burden. The government creates the problems. And you look to the government to fix the problems!
When you’re a hammer, everything is a nail! The GOP got a lot of mileage out of their mantra of ‘cut taxes and lower spending’. This kind of propaganda did no harm as long as taxes were high enough and spending was reasonable. Using their argument that the non-existant ‘liberals’ wanted to ‘raise your taxes’ and spend ‘your’ money on non-essential ’social programs’ got them elected. By using this simplistic argument the GOP’s high command created a large population of true believers…ditto-heads…! The problem of course is that the ‘high command’ now either believes it’s own propaganda, or is stuck with it. How could they agree that there’s no cash or credti in the system because of their policies? Talk about political suicide! In real life taxes have to be appropriate and spending limited by the funds available. For instance: Two back to back wars, justified or not, require a lot of money. The Bush Junta decided to borrow the cash so they wouldn’t have to impose a war tax….besides, Iraqi oil was going to pay for the war…..remember that one? True to their word, they lowered taxes, threw the federal government into a massive debt situation, did nothing to deal with an onrushing recession and when it all blew up…they blamed the ‘liberals’. I have no idea how all this is going to turn out, but I know for certain how it started and who started it….the reactionaries that hijacked the GOP and the suckers that voted these bums into office. My opinion! No kiddin’!
I’m no economic expert, but this is how I see it.
People aren’t going to have any money to spend if you tax the heck out of them. Fewer taxes means more consumer spending. More taxes means less since they have no money.
We don’t.
Those two ways you mention are government ways, and not the only ways.
Let the free-market correct itself, and although it might be rough for a while, we’d be really well off for a long time afterward. Minus the additional national debt!
Spending money in a recession makes sense, IF YOU HAVE MONEY. The problem is that the government doesn’t have money. They continually spend more money than they tax in each year causing us to be in a huge debt right now that’s growing faster than ever. Taking out loans or printing more money in order to put money into the economy isn’t going to help because the downside outweighs any benefits.
Of course then there’s the issue on what specifically you spend the money on. Obama’s spending it on temporary things that will have little to no long term economy growth. He’s paying people to work instead of promoting economic and job growth.
OK lets say you have 1000 dollars and you spend 100,000 after a while someone is going to what payback for what you bought.
So best to cut your spending don’t agree and live with in your means?
Taxes do nothing but rip you off and suck the life out of the nation you think it is great we pay 500 dollars for a hammer?
So get a grip on reality you soon understand you first cut your spending than build savings.
The words that should strike fear into ever American
is:
We are here from the government and we are here to help.
So, if I go to an auction with you, bid AGAINST you for stuff and pay for my winnings with YOUR checkbook you’d thank me for helping you?
That’s how ALL government spending works, friend. "The economy" is simply what we call people interacting; acting upon and exchanging resources to meet needs – their own and each others. All government spending competes AGAINST this. It is literally impossible for an exception to exist.
So addressing your bullet points:
1) Government is incapable of putting money into the system. It rearranges it and keeps some out for itself in the process thus guaranteeing in all cases a net REDUCTION in resources which absolutely WILL be allocated less effectively than had government stayed out of it.
2) ACTUAL tax-cuts (not spending programs someones LABELS "tax-cut") always have a stimulative effect. No exceptions. Since we’re still well-above the revenue optimum, they also yield MORE money into the Treasury, not less.
ALL Republican-proposed tax-cuts have always included ALL tax-brackets. Again – no exceptions. Either Democrats label each and every person not too poor to pay taxes "the rich," or they’re simply LYING when they use their "tax-cuts for the rich" phrase.
Go ahead and spend your way out debt and see what happens. Spend your money and get a better education, put in a new driveway and sidewalks, get super high speed internet and more phone lines, and some new vehicles and see if it stimulates more revenue for your household. Let us know how it turns out.
You’ve been schooled by all the answers here. Feel stupid?
That is wrong precept. Republicans want objective spending not wasteful spending like the POTUS is doing.
If you put money in infrastructure,your basically spending thousands,if not billions of dollars on temporary projects that don’t last.It may employ 30 people(or so) at a time during the course of the project.You may pick up a few more people working for the raw materials.Either way,after the job is over,so is any money from those projects(even in trickle down,like lunches,other spending around the job site etc)
Roosevelt tried this,and it didn’t work.Unemployment was still at about 10%.
Creating Government jobs with stimulus money doesn;t work either.Most jobs created now in government are redundant,and copy programs already existing(This means waste).
As far as the stimulus checks issued,60% of mine from 2007 went to paying my taxes,so it was shell game as far as giving money out and back to the government.
If you think that the top 1% get a tax break then your obviously misinformed.I’m not rich at all,but every year I have to pay.Between my Wife and I,we don’t make a whole lot of money,but under Clinton,we would be called rich(I guess 30+k a year does that)
If you cut taxes,business grows,people get hired.The overall morale of people goes up,and opportunity is created.This leads to prosperity for the individual.
Since you don’t seem to understand this(and probably weren’t alive during Carter) I expect either you make a decent wage,or you live with your parents or off of someone elses money.
Because buying a loaf of bread with a shopping cart full of worthless dollars is a not very stimulating.
Wow! Great answers from various people.
I am just going to point out that this is EXACTLY what the Soviets did post WWII. How well did that work out for them? Eventually, all of the bridges will be painted and built. All of the roads will be repaved. All of the state parks will have their renovations. Then what?
Really, the best thing to do would be to have let the market work itself out. We would be FUBAR for a while, right? Things would either pick up or adapt with the times (Darwin fans, no?).
The reason that your job, my job and everyone else’s has flown over seas is over nothing more or less than government intervention, over-regulating and upping taxes every which-way. Does anyone think that it was evil capitalist who wanted to exploit the third world? Does anyone actually think that it is more convenient to move your high-tech company elsewhere?
Think about it…
So your ASSumption is that consumers won’t spend money they have but if you confiscate it in taxes then government will spend it? Nazi much?