Congress should prefer direct economic stimulus to austerity.
My partner and I negate the Resolved: Congress should prefer direct economic stimulus to austerity. I will start with a proper framework for today’s debate. Here are some definitions:
The standard, or weighing mechanism for today’s debate is the net benefits. In this debate, the affirmative will have to prove that stimulus achieves net benefits better than austerity does. If not fulfilled, the negative shall win this debate.
Contention 1: Austerity improves economic growth
Austerity has worked in many countries and it has improved their economy. It has created a stabilized economy. According to Michael Tanner, a senior fellow at the Cato institute, states, Estonia dramatically improved by undertaking austerity measures and was able to reduce its unemployment rate to 7.6%. In addition to that, according to Michael Witte, a senior research fellow at the Sir Arthur Lewis Institute of Social and Economic Studies, “Our political and business leaders can and must chart a path of economic recovery and social stability with the help of austerity.” Also, According to Veronique de Rugy, a senior research fellow at the Mercatus Center at George Mason University, states, “Sweden’s growth rate is 4.9% because it uses austerity while ours is 1.9%. Sweden’s economic growth has, of late, trumped every other European country’s.” These economies are so different, and makes austerity work in any country so it will work in America. Additionally, Economist William Hosinski argues that economic growth relies on investment which is essentially the forgoing of consumption as well as a working price mechanism. Government spending distorts prices and causes its externalities tthat outweigh its short term benefits. The Impact is that austerity improves economic growth which stabilizes our economy.
Contention 2: Austerity decreases the unemployment rate. This helps make a stable and strong economy by creating consumer confidence. Austerity cuts spending. This saves money and makes corporations open up jobs. The Business times reports that, “In Canada, the unemployment rate is 7.6% as the result of Austerity measures. According to Richard Epstein, “Sweden’s unemployment rate went from 9.1% to 7.8% because the used austerity.” This was all caused because of austerity plans made by these countries. These countries are so different which makes austerity versatile, so it will work in any country with the right policies. If more people have jobs, more people will spend which creates a better economy.
Contention 3: Austerity lowers debt. Austerity plans lower debts which helps stabilize the economy. Debt is bad since if we don’t pay it off it can create problems with international relations. Brian Doherty, senior editor at Reason magazine, states on February 24, 2012, “US debt to GDP hit 101%. This will become a huge problem since if we don’t pay off the debt we owe internationally, we will not be trusted to be invested in and it will cause dollar dumping.” Austerity decrease debt by cutting down spending and increasing tax rates to pay back the debt, then the government will pay back the taxes when the economy is better.. Stimulus just spends and decrease tax rates which increase debt. Estonia is running a budget surplus. Its national debt is 6 percent of GDP. By comparison, Greece's is 159 percent of GDP. Ours is 102 percent. Also, Latvia’s budget deficit will be just 1.2 percent of GDP, and the national debt is just 37 percent of GDP and declining. Sweden’s debt decreased from 42.8% of the G.D.P to 39.7% of the G.D.P. This was caused because of austerity. If it has worked in such versatile countries, it will work in America with the right policies for sure. Less debt creates a better economy by reducing how much you owe and increase the G.D.P and keeping strong international relations
Judge, if you want America to remain in its current state, vote for our opponents. But, if you want America to have a strong and stable economy, I cannot see anything but a negative ballot.
I would like to thank my opponent (and his partner) for this debate.
I disagree with the standard. Seeing as Con is the instigator of the debate I see it fitting that he should have burden of proof, or in the least that it be equally shared.
“Contention 1: Austerity improves economic growth”
My opponent starts by citing the Cato Institute to validate that austerity has worked in Estonia. I would first like to point out that the Cato Institute is a biased source because they have a political agenda; therefore, they are not objective.
Secondly, comparing Estonia and United States is like comparing apples and oranges. As my opponent mentions in his third contention the United States’ debt is 101% or 102% of GDP (he cites both). Estonia on the other hand never had debt more than single digits .
Next Sweden is given as an example to show austerity spurs economic growth. However, I would argue that Sweden is not truly practicing austerity. “The spending plan of Prime Minister Fredrik Reinfeldt provides for an increase in spending from 2012 to 24 billion kronor (2.83 billion euros) – “of which 23.4 have already been spent”, reports Svenska Dagbladet – or between half and one percentage point of Sweden’s GDP.” 
Also refer to the graph below .
My opponent then claims, “These economies are so different, and makes austerity work in any country so it will work in America.”
This is not a very accurate statement though. Estonia and Sweden are actually similar in many ways: both small countries, in Europe, using the Euro, with much smaller debts than the U.S. Estonia has a population of 1.34M and Sweden of 9.453M (World Bank).
“Contention 2: Austerity decreases the unemployment rate."
My opponent supports this claim by citing two sources who say unemployment went down in Canada and Sweden due to austerity. However, I could not find any such article online reporting this, so I wonder if my opponent might provide the link to said articles in the next round. Until then this point should not be seen as valid because my opponent does not explain why unemployment would go down, and only cites two vague sources which at this time cannot be found.
“Contention 3: Austerity lowers debt.”
I agree that if implemented at the proper time under proper circumstances austerity lowers debt. However, if implemented at the improper time it will only hurt the economy. This is in fact the perfect transition to my own argument which is that now is not the proper time for the United States to enact austerity.
At this present time austerity will only exacerbate the United States’ economic crisis. The US is still in what is considered the worst economic climate since the Great Depression. Applying Con’s principles to the current economy would not be beneficial in the slightest. Right now the job market is unstable, many are dependent on government funding, and businesses and families alike are in fear of looming tax hikes. What Con is proposing is, despite all that, we take more money from the economy, cut back on government programs and spending, all while placing a larger tax burden on the people.
Even the IMF warns that the US will only “grow at a sluggish rate in the coming year as government spending cuts threaten its recovery.” The report goes on to say, “Over the next few years, as federal fiscal policy shifts toward austerity, it is likely to be a headwind against economic growth”  . What the US needs is a stable economy and a much larger growth rate. Making cuts and increasing taxes does not promote growth, and is therefore not the solution for the US.
Overall, it is apparent that austerity will only hinder growth. This is why Congress should prefer economic stimulus, which as my opponent defines it, “is an investment designed to jump start something such as more jobs, more consumer confidence, more investment, and more growth.” This is precisely the antidote to the current economic state in America.
I look forward to my opponents’ response.
awesomeness forfeited this round.
Unfortunately, my opponent has forfeited. Extend my arguments.
awesomeness forfeited this round.
What a shame. Well, vote Pro I suppose.
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