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April Public Forum Debate

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Voting Style: Open Point System: 7 Point
Started: 4/9/2008 Category: Politics
Updated: 8 years ago Status: Voting Period
Viewed: 2,132 times Debate No: 3577
Debate Rounds (4)
Comments (2)
Votes (5)




I am representing the PRO side of the April Public Forum topic Resolved: That the Economic Stimulus Act of 2008 will successfully mitigate economic slowdowns over the next year.

Observation 1: The resolution reads "successfully" this does not imply substantially or significantly, it implies successfully. Successfully is defined by Merriam-Webster as "resulting in a favorable or desired outcome" Therefore, we must look in this debate at whether it meets the goals of the legislators in proposing the bill. The CON must show the complete failure of these goals or a negative result.

Observation 2: The phrase "over the next year" limits all positive and negative outcomes to those occurring within the next year.

Contention 1: The stimulus meets all of the goals it was created to achieve.
Benjamin Bernanke in a testimony to Congress stated that the goals of the stimulus must be the following:
1. to put liquidity into the market by increasing consumerism
2. increasing business spending
3. raising home prices.

The stimulus meets the first goal. According to the ISCS, there will be a 26% increase in consumer spending. Any increase will meet this goal, so this goal is upheld.

Business spending will increase. During recessions businesses have tended to spend more money. If they are given a tax allowance as the stimulus package does, they are very likely to increase this spending. It is common sense.

Cutting the loan limits for Fannie Mae, Freddie Mac, and the FHA will increase real estate value. Stephen Horan, head of private wealth for the CFA institute said, "Banks, knowing that they can possibly repackage these jumbo loans and sell them back to Fannie Mae or Freddie Mac,
might now be willing to refinance at lower rates," This will make buying a home easier and will increase home prices.

Why vote PRO?
Because the stimulus package meets its goals in that it will:
1. increase consumerism by 26%
2. increase business spending through tax allowances
and 3. increase home prices by making home buying more accessible.


As the contender in this debate, I intend prove the following:
1. My opponent's confinement of the topic is inaccurate or superfluous.
2. My interpretation of the topic is superior, particularly paying attention to the context of the resolution vs. specific words.
3. That Contention One, by my opponent, according to both his definition and mine, are in fact false.

First, I hate to haggle over definitions, but the terms of the debate as you've framed them are overly restrictive. In essence, you are positing that doing something is better than doing nothing, which really leaves little to debate.

So let's look at the entire topic:
Resolved: That the Economic Stimulus Act of 2008 will successfully mitigate economic slowdowns over the next year.

The definition of success you provide is acceptable, however your interpretive focus is misplaced. Successfully, in this context, focuses on the action of mitigating the economic slowdown that is expected in 2008-2009. There are a number of methods of empirically measuring this. The primary method would be to look at the GDP results in successive quarters following the stimulus package's implementation. If we continue to have economic slowdowns, that would be an indicator of potential failure of the package's stimulus impact. This argument however, is incomplete, to be fair. In order for the entire premise to be false, it would need to be proven that, without the stimulus, the slowdown may have been worse (basically the definition of mitigate).

The extension of success in this equation, in order to make the debate meaningful, would be to compare the stimulus with both its impact on the slowdown versus its cost. In other words, if we raise our debt spending by $168 billion dollars but mitigate the economic slowdown by only .01% of GDP, was that investment successful versus the cost? If we manage to stop a leak in one place of a levee, but manage to allow water in in two other spots, can we seriously argue that plugging that one leak is successful in mitigating the damage? I would argue that question is inherent in the resolution. Otherwise this debate lacks any substance versus maintaining the status quo.
So, to conclude the definition discussion, I propose to extend my opponents success criteria to include an examination of the cost of the package versus the potential results delivered.

Now, onto the primary contention that the stimulus package meets all of the goals it was created to achieve.

Goal 1, Increasing Consumerism.
The only way this argument succeeds is if folks will actually spend the money on items they wouldn't have purchased to begin with. Recent surveys (1) indicate that less than 12% of the rebates sent to consumers will used on unique spending, as opposed to paying off debt, savings, or items that would have been purchased anyways like groceries or gas. My opponent's argument that consumer spending will increase by 26% lacks a source, so I can't review it at this time. The report also assumes that inflationary pressures will remain flat, which may not be the case. Gas prices during the summer alone may eat some of those rebate checks.

Goal 2, Increasing Business Spending
Given the timing of this stimulus package, I'm afraid my opponent's constraint of realizing the benefit of this spending in terms of real GDP in a year may be misplaced. The vast majority of the package is aimed at goals 1 and 3, and the benefit here likely wouldn't be realized until year 2 or 3 of the economic periods in question. In reality, the economic stimuls of the business spending is marginal at best.

"The business tax cuts included in the stimulus package, however, offer less stimulative value. A 2006 paper published by the Federal Reserve Board shows that the economic bang for the buck of "bonus depreciation" for businesses is very modest. Per Zandi: "… of all the tax and spending policies considered, it provides the least amount of stimulus. Such incentives offer a limited boost because many businesses have difficulty quickly adjusting long-planned capital budgets.""

Goal 3, Raising home prices
I'm not sure raising home prices is a good measure of slowing an economic downturn, since we're watching in real time the correction of the market from the "real estate bubble" to begin with. Second, the stimulus package as it currently exists, likely won't stem the tide of the correction that our economy is currently starting to have (2).

"Offering yet another view, Wharton finance professor Richard Marston thinks today's economic problems are quite different from those of 2001, and likely to be more severe and long-lasting -- and resistant to remedies. The key feature of today's downturn is the collapsed housing bubble, which has a broader effect than the burst tech-stock bubble of 2001, he says.

While the rebates will lead to more spending, Marston notes, the lack of a long-term tax cut will make the stimulus package less effective than the one in 2001. At the same time, the Fed's interest-rate cuts will not work as well because today's credit problems are caused by lenders' fear of risk rather than a shortage of money to lend. Reducing rates will not necessarily reduce that fear. "I think the banking part of this is more problematical this time than it was in 2001 because we're in the middle of a fixed-income crisis -- because people just don't trust each other," he says, adding: "It's very scary, very scary.... I don't see a quick recovery.""

Making home buying more accessible isn't necessarily a good thing if the person can't afford the home to begin with. That's part of the reason we're in the mess we are today. If we further the housing bubble, and by its logic allow people to borrow more against their inflated equity, we are only delaying the inevitable, and making the pending correction in our business cycles even worse.

The reality of our current economic issues is due to too much consumerism and debt. This stimulus package does little to remedy that situation. As a result, its ability to mitigate the economic downturn will be largely unrealized. The economy has some lumps to take as part of our natural business cycles. The stimulus package is ill designed to address or minimize those corrections.

Why vote CON?
1)Consumerism will increase minimally (10-11%) at best, not enough to make the $147 billion dollars spent worthwhile.
2)Business spending, as expressed in the stimulus package will not have the desired effect in the window proposed (one year).
3)Furthering the housing bubble (of artificially inflated housing prices) will not mitigate this pending economic slowdown. Arguably, stalling it at all may actually make the downturn worse.

Debate Round No. 1


First, my opponent claims I am being too restrictive in my definition. The phrase successfully mitigate simply means that the stimulus must lessen the impact of the slowdowns while meeting its goals with a favorable outcome. I don't have to prove solvency, mitigate is defined by Merriam-Webster as " to make less severe or painful," it is clear that the stimulus makes the slowdowns less severe and painful. I will address this fact as well as my opponent's argument shortly.

Alright, my opponent claims the goals established will not be reached.
For the first goal of increasing consumerism, he first questions my st6atistic of 26%, which I did source, although I spelled the source wrong . My source is the ICSC, the International Council of Shopping Centers. Even if we take my opponent's statistic there is still an increase in consumer spending. It may be small, but it mitgates the effect of the slowdowns. Businesses will have an 11-26% increase in Profits.

For my second goal, my opponent claims the benfits will not occur within the allotted time. He did not however directly rebut my argument. It follows that if you uphold that argument, that there will be short term benfits as well.

For my final goal, my opponent claims that people won't be able to afford new homes, but, that's what mortgages are for. They can buy now, pay later when the economy is back to normal.

Furthermore, contrary to my opponent's worries about the budget deficit, any problems regarnding the deficit will not develop until more thean a year from now

Finally, even if the rebates are not spent, they still mitigate. They will allow at risk families to last the slowdowns.

Why vote PRO
1. Any negative outcomes occur too late to be relevant
2. The stimulus meets its goals
3. It will allow low income families to survive these times of trouble.


My opponent does nothing to refute the reasons I consider his definition to be too restrictive. He simply restates his original argument. To be clear, I'm not asking that the stimulus package prevent or reverse a recession, what he is terming as solvency. That is beyond the scope of the resolution. What I am trying to prevent is the claim that any increase in GDP as a result of the stimulus proves that it has met its goals. In order for his argument to prevail, he must be able to prove that the result of the stimulus package is sufficient to justify the cost, especially if we consider the long term effects of the short term gain. Simply arguing that any mitigation would be sufficient is unreasonable by most standards. You could give me the $168 billion dollars Congress allocated to this effort, and I can assure you the domestic product of North Carolina would rise substantially. That doesn't mean we should do that. All I am asking is that the cost of the investment not outweigh the benefits, especially if it means delaying and perhaps worsening the long term consequences of our current economic patterns. If this package actually worsens (lengthens) the economic downturn by failing to address the real causes of our economic strife, then his proposition should be rejected on face.

Goal 1, Consumer Spending.
My opponent makes the false assumption that an 11% increase in consumer spending would be sufficient to not only increase Gross Domestic Product, but would result in an increase of the same percent of business profit. This is fallacious at two levels. First, there is the false assumption that a 1% increase in consumer spending translates to a 1% increase in profits. This ignores far too many variables, in particular the increase in cost of production (especially energy costs). There are significant inflationary pressures at play and thus the costs of production can chew up marginal gains in consumer spending. This results in little, if any, net effect on GDP.

Second, this small gain in consumer spending will be competing with an overall decline in the value of the dollar. You have more dollars chasing the same products, again mitigating any economic benefit of pushing more dollars into the system.

Finally, my opponent basically proves my argument about the restrictive definition here. According to him, if there is even a 1% increase in consumer spending, the package has met its goals. This is false at two levels. First, 1% may not offset or mitigate the impending slowdown as measured by GDP. Other factors besides consumer spending my offset any gains in this category. Second, if inflation spikes due to other factors or even because of the stimulus, as some have argued, his gains are completely negated.

Goal 2, Business Spending
Apparently my opponent missed the citation that said that businesses in general have difficulty in quickly adjusting capital budgets to accept the opportunity of additional investment. Simply put, it takes longer than a year to realize real GDP gains from an investment of this nature. This is compounded by the fact, also not rebutted, that this aspect of the stimulus package is hardly stimulating (pardon the pun). The stimulus package isn't going to gain business investment by spending more on office supplies. The investment must result in real domestic output for any GDP gains to be realized, especially in the time period that my opponent is burdened with.
This goal is without question the weakest of the ones enumerated by my opponent. Without this succeeding, by his own standards, he has failed to meet his burden of proof.

Goal 3, Raising home prices
In this goal, my opponent reveals his lack of understanding in the housing markets and how their patterns of activity have actually created part of this mess we're in. The housing bubble has created artificially inflated prices for home. He wants this to continue. This unfortunately creates three problems. First, when the market corrects itself, as it is doing now, consumers are unable to realize the illusory equity gains they thought existed when their particular housing market was in the bubble. Houses stay on the market longer and prices inevitably decline. This is a long needed correction in the economy. The stimulus package would at best delay this correction and potentially make the eventual correction even worse. This is never refuted by my opponent.

Second, the inflated price creates a demand for mortgage dollars that result in less than honorable lending practices, especially in the sub-prime and variable rate categories. We are witnessing the consequences of this in the number of foreclosures rapidly increasing. We were loaning people money they simply couldn't afford borrow because rates would inevitably go up, and their credit (due to fraudulent lending practices) never had the backing to sustain the mortgage in the first place. My opponent falsely believes that rising house prices will help this situation. I think I have proven the opposite to be true. The market needs to correct itself, whether we like it or not.
Third, once the foreclosures do happen, the inflated value of the house results in lenders being unable to recapture even close to 100% of the value of the house, because people won't take on the inflated value once the bubble in that market has burst, as it has across much of the country.

Finally, my opponent basically concedes the argument that this stimulus package could make things worse long term. His argument is that if the negative factors do not occur within a year, they are not worth considering. If the stimulus package results in an even longer recession, can we honestly call that a success? If we gain GDP from the package (which I still argue is suspect), but it fails to meet the threshold of actually mitigating the slowdown and, in fact, makes the slow down worse, how could anyone reasonably argue the stimulus successfully mitigated the economic slowdown? Answer: they can't, because it didn't.

Why vote CON:
1. Any negative outcomes from the package, regardless of time frame, must be considered in weighing its success. This is especially true if the impact directly effects the economic slowdown, which my opponent has conceded has a risk of occurring.
2. My opponent has not proven that the stimulus meets any of its stated goals.
3. The stimulus is a short sighted and ineffective effort to hold off a recession that represents a natural fluctuation in the business cycle. Doing so runs the risk of making this current slowdown worse, which is an outright rejection of the benefits of the package that my opponent supports.
Debate Round No. 2


First, as for the argument over the limits of this debate. I will again say this: The resolution only applies to the next year. If benefits come later or negatives come later, it doesn't matter. Although the stimulus may be short-sighted, the resolution is as well. Secondly, his claim that I failed to refute his argument about the scope of the resolution fails. He did not refute the definitions of Merriam-Webster, and the phrase over the next year. I agree with his arguments about creating a new housing bubble, budget deficit increases, etc., but my opponent has yet to prove that these negatives will occur within the allotted time frame as required by the resolution. The long-term of the stimulus is irrelevant, as the resolution only focuses on fairly short term impacts. Now onto the goals and the direct mitigation.

Goal One: Even if I was fallacious in stating that an 11% increase in consumer spending will translate to an equivalent profit increase, the fact is consumer spending increase. Not by much, but it increases. It meets that goal. That is all I have to prove, I don't even have to prove that that increase will help, I simply must prove that that increase will occur. Ben Bernanke may have made a bad goal, but we are simply reviewing the completion of goals in order to determine success. Mitigation is addressed differently.

Goal Two: Businesses have planned for capital equipment increases. This is something that is done in economic slowdowns. The tax allowances will let them buy more equipment, which will in turn lead to more spending. Budgets are not carved in stone, if they were, businesses could not survive unexpected outcomes. They will be able to take advantage of the allowance.

Goal Three: I know this creates a new housing bubble, but, the increase will last at least a year, and as stated by Robert Lever, could help reduce defaults at least in the short term. So, even if this new bubble leads to a second Great Depression that starts in 2010, the goal still is upheld.

Mitigation: This my opponent fails to refute. Since mitgating means lessening the impact, putting money in the hands of those who will be impacted the most is going to mitgate the effects of economic slowdowns. People will be more able to outlast the economic slowdowns with $600 more dollars in their pocket. Less debt and more savings will do nothing but help these families over the next year. This is the mitgation. Unless my opponent proves the economy will worsen for this, I do not have to prove GDP increases, economic growth, etc. I must lessen the impacts of the slowdowns.

Why vote PRO:
1. The goals of the package are upheld
2. The impact of the slowdowns is lessened
3. Negative impacts will be postponed until this resolution is null and void.

Note: This will be my last round, so if you please, bno abuse becuase of it. If you wish we can debate again.


Doclotus forfeited this round.
Debate Round No. 3


Are you serious? I got back in time to post this round. okay then, scratch my note, unless you interpreted it to mean that you shouldn't debate anymore. If so scratch my arguments here. Otherwise I'll continue.

We extend my interpretation of the limits of the debate. Any mitigation is within the limits, and anything that even slightly meets the goal of the bills;s framers is successful, whether that goal mitigates or not.

Second, extend the argument that consumer spending increases. I have not been arguing that this increase will necessarily mitigate, and it doesn't have to. The stimulus must mitigate, but not necessarily through these goals.

next, my argument that budgets cannot be so rigid that businesses will not increase spending a dime is extended. Businesses must have a flexible budget, otherwise they would fails everytime the unexpected occurs. There will be at least a small increase. That goal is met.

Fourth, although this may create another housing bubble, it will last for the next year, and even if it bursts, the burst will come to late to be relevant to our debate.

Finally, my opponnent has never addressed my mitgation argument. Giving money to those impacted most will certainly mitigate the impact of the economic slowdowns.

PRO: why vote
1. The Package lessens the impact of slowdowns on high risk families
2. the package meets its goals
and 3. any negatives will come too late to be relevant to the parameters of this debate
Please vote PRO


My apologies, my opponent seemed to be pulling the plug on his participation in this topic so I did the same. I shall at least try and summarize the debate as I see it.

The whole topic of definitions really boils down to my central complaint about the equation that the proponent frames this topic in. His argument, by the way he defined/framed it is basically that if we hand out $160 billion dollars to people, the resolution is affirmed because more money in peoples hands will naturally mitigate an economic slowdown.

My reason for engaging the topic at this level is to level the playing field and give the topic an actual reason for debate, to discuss the worthiness and potential effects of the package passed by Congress. My opponent reduces the topic to a semantic interpretation for the sake of winning an equation, versus actually discussing the merits of the impending package.

Success, even under his interpretation implies a comparison to two other elements, doing nothing, or doing something else. I take issue with both alternatives, which he effectively ignores. I also consider whether this package could make things worse, which he dismisses due to a logistical constraint of time. If the result of the package is an extension or worsening of the pending recession, then the resolution should be rejected on face.

Now, onto the economic discussion.

Restating refuted arguments does not constitute an argument. My opponent places the consumer spending argument in a vacuum, and ignores all other economic variables like inflation, savings rates, etc. I'm assuming he has accepted GDP as the measure of slowdown mitigation, and yet he has yet to prove that a 1-11% increase in consumer spending would result in a sufficient gain of GDP to merit affirming the resolution. As I have proven, other economic factors, particularly inflation and our countries high debt ratio's will likely prevent such spending from having much effect at all.

The second stated goal, regarding business investment has never really been refuted, especially in the sections where any business investment wouldn't yield economic returns (if they do) in the coming year. He makes blanket statements about businesses adjusting budgets and buying equipment, but doesn't substantiate any of them. A simple financial accounting class would reveal that these type of investments usually don't bear fruit until several quarters have passed. Just buying a tractor doesn't boost the economy.

Finally, my opponent actually agrees that this package could extend or repeat the housing bubble, but dismisses this due to time constraints. This speaks to the fundamental disagreement we have with this topic. If the stimulus package actually makes our economy worse, regardless of the time frame, the resolution should be rejected on face. Otherwise, the comparative value of the package falls versus the alternative of doing nothing and letting the correction pass naturally or perhaps doing something that actually addresses the problems our economy faces. Affirming the resolution amounts to placing a band aid on a wound that has come dangerously close to an artery.

The economic stimulus package is a waste of taxpayer dollars and will do little to nothing to impact the pending economic slowdown over the next year. Worse, it will likely exacerbate this recession, due to delaying the necessary corrections in the housing & financial markets, and possibly worsening our inflation by injecting more cash into the system by inflating our budget deficits.

There is a reason they call them business cycles. We're approaching a downturn, its better we ride it out than to make it worse. Therefore, I recommend rejecting the resolution.
Debate Round No. 4
2 comments have been posted on this debate. Showing 1 through 2 records.
Posted by LR4N6FTW4EVA 8 years ago
I was testing an idea for an invitational i have. If I was abusive or too restrictive now I know right. should we disregard my fourth round post?
Posted by Doclotus 8 years ago
Good job, LR4N6FTW4EVA. I enjoyed our debate. I got involved in academic debate when I was your age, and I don't regret it a bit. If you'd like some constructive critique, feel free to contact me at (since you can't do that here) Same profile name.
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