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- #21
If adequate spending were available in the market place, we wouldn't be in a recession. A reduction in government spending would reduce economic activity. Higher government spending is necessary to put money in peoples' pockets to spur domestic consumption and take us out of the recession. Low taxes and interest rates will help but likely will be insufficient to quickly pull us out.
If the economy is growing, then the debt can be handled in the future when taxes can be raised and spending can be decreased (because it will no longer be necessary).
Higher govt. spending to spur economic activty is a double edge sword, because that money now is borrowed money. It adds to the national debt it also deepens with each passing day as interest builds on that debt. The other thing it does is devalue the dollar and reduce spending power causing the govt. once they get into this mode to keep giving more and more money to stimulate the economy. I am afriad I must disagree with you on this, however the govt. must keep taxes low for everyone and at the same time reduce spending and this massive debt load, along with spending new money wisely such as domestic energy production etc. This will free up even more money and strengthen the dollar and enhance buying power and stimulate the economy. You want to see what a massive influx of cash does under an economic downturn or even the mere mention of it, look at the non impact of the recent "bailout" or the non-impact of giving the Auto Industry 35 Billion dollars.