Flaylo
Handsome Devil
- Thread starter
- #21
As our government cuts spending it reduces the amount of money going into circulation in the economy.
That will further decrease the velocity of the remaining money in circulation, thus further depressing US businesses.
Now in the long run reducing spending is obviously a good idea.
But in the short run reducing spending will further exacerbate the recession
(yeah yeah I know what recession, editec? the recession that the people are having, not the recession that the macro-economy is no statistically speaking no longer having) .
Some money needs to be pumped into the economy to stimulate things, the question where should that money go? Tax cuts for the purpose of creating jobs is a form of "stimulus" that hasn't worked, though the supply siders don't see it that way.