should government fight recession with spending hikes or tax cuts?

3 Answers

  • Doug B
    Lv 7
    9 years ago
    Favorite Answer

    Take a look at Ireland. Faced with the same situation, Ireland cut spending, cut the public workforce, and cut taxes. The result?

    Ireland is in desperate need of financial assistance from the EU, and unemployment is at 14.3%. Zero economic growth. In a depression because of the same plan Romney wants for the US.

    We need to raise taxes and spend the revenue to rebuild American infrastructure. There are *77,000* bridges identified by the Army Corps of Engineers as being either in dire need or repair or needing to be replaced. Think of the construction workers, suppliers, and support workers that would pour money into. Then that money goes for food, durable goods, cars, housing, increasing both the economic flow and local revenues through sales taxes. Increased sales tax revenue allows local municipalities to do their own deferred maintenance, continuing the cycle.

    This needs to be couple with carefully-targeted cuts to bloated programs like the defense budget. But not huge austerity programs that pull money out of the system when we need to get money moving! Governments are not businesses, they can be run at a loss for centuries without much pain. But governments need to be the source for economic movement.

  • 9 years ago

    With Obama's plan to end this Recession, you now have two methods used by Democrats and two used by Republicans

    1921 - Republican - Result: Roaring Twenties

    1933 - Democrat - Results: New Deal which added about 7 years to the Great Depression

    1981 - Republican - Result: Longest Economic Expansion in American History

    2009 - Democratic - Result: After 3-1/2 years employment rate still above 8% with no signs of approving

  • 9 years ago

    Spending cuts, People cuts in government and cut taxes.

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