CrusaderFrank
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- May 20, 2009
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Do government deficits help or hurt the economy? Which is it?
Can it be both?
Can it be both?
Last edited:
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Wow. 78 views, 2 answer?
Feel free to quote your favorite economist on the topic: Krugman, Samuelson, Corzine.
deficits don't matter (unless a Democrat is in the WH)
~ Dick Cheney
Reagan Proved Deficits Don't Matter* | Crooks and Liars
It can be both only to LOLberals.
In reality, short term TRADE deficits, can help foster a growing economy. After that, deficits only lead to debt. That's when the currency debasement begins.
Do government deficits help or hurt the economy? Which is it?
Can it be both?
Do government deficits help or hurt the economy? Which is it?
Can it be both?
Yes it can be both
For example deficits that are due to building bombs so we can go destroy oil production in Iraq because we want war are bad; however deficits that are due to creating jobs in production food, energy and lifting people out of poverty are good.
Furthermore there is a difference between deficits and a change in deficits.
For example positive change in deficits (getting smaller) due to cuts in spending/and or increases in taxes is bad in a depressed economy that's in a liquidity trap with very low inflation. However positive changes in deficits during a period of spiraling out of control inflation due to cuts and tax increases is good.
cuts in spending bad in a depressed economy that's in a liquidity trap with very low inflation.
Reagan deficit, good.
Bush deficit, good.
Obama deficit, bad.
And, of course, Clinton surplus, non-existent.
nothing is a one-size-fits-all cure-all. Government Deficits are a tool in the arsenal of the public (Government, speaking for public), appropriate for particular circumstances. When the economy stalls, and when nobody else from the private sector is borrowing, then money gradually decirculates (into savings), and the money supply deflates. Then Government can wade in, borrow up unborrowed credit, and spend the money on important public projects, to stimulate the economy.
Government over-spending is not, generally, beneficial
Do government deficits help or hurt the economy? Which is it?
Can it be both?
Do government deficits help or hurt the economy? Which is it?
Can it be both?
It is a stupid question.
Government spending and taxation affects the economy. The difference between government spending and taxation results in a decifit or surplus. A deficit or surplus doesn't affect anything. It is just an accounting number.