The Instigator
bigbass3000
Con (against)
Losing
6 Points
The Contender
SchinkBR
Pro (for)
Winning
19 Points

POFO debaters, April topic. POFO debaters only please.

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Voting Style: Open Point System: 7 Point
Started: 3/25/2008 Category: Politics
Updated: 8 years ago Status: Voting Period
Viewed: 1,584 times Debate No: 3377
Debate Rounds (3)
Comments (3)
Votes (7)

 

bigbass3000

Con

Practice for Nat quals
Resolved: That the Economic Stimulus Act of 2008 will successfully mitigate economic slowdowns over the next year.
Observation 1-The affirmative must prove that the economic stimulus act by itself will mitigate not any other corresponding policies such as Term Auction Facility

Observation 2-The resolution is that the economic stimulus act will successfully mitigate the economic down turn in the next year. You do not win simply by showing that there was some mitigation. If the government spends enough money it's sure to have some effect. It has to be successful mitigation. That means that the stimulus act has to meet the expectations/goals of those that advocated and passed it. And it has to do that in the next year 2009.

Con.1 Tax rebates Vs. Tax reductions

Back in 2001, we had the same type of idea proposed by Bush, to give rebates to the economy to stimulate the economy, but what you must understand is this idea did not work until tax reductions across the board. According to Brian M. Riedl, "Tax cuts vs. tax rebates," Washington Times, January 16, 2008. "
•Critics contend that rebates "inject" new money into the economy, increasing demand and therefore production.
•But every dollar that government rebates "inject" into the economy must first be taxed or borrowed out of the economy (and even money borrowed from foreigners reduces net exports).
•No new spending power is created; it is merely redistributed from one group of people to another.
Take the 2001 tax rebates, for example:
•Washington borrowed billions from the capital markets, and then mailed it to families in the form of $600 checks.
•Predictably, consumer spending temporarily rose, and capital/investment spending temporarily fell by a corresponding amount.
•This simple transfer of existing wealth did not encourage productive behavior; the economy remained stagnant through 2001 and much of 2002.
It was not until the 2003 tax cuts -- which instead cut tax rates for workers and investors -- which the economy finally and immediately recovered:
•In the previous 18 months, businesses investment had plummeted, the stock market had dropped 18 percent, and the economy had lost 616,000 jobs.
•In the 18 months after the 2003 tax rate reductions, business investment surged, the stock market leaped 32 percent, and the economy created 5.3 million new jobs; overall economic growth doubled. ", What this means is that even though the rebates will go in, because the Government has to take money to give money, it does not do anything. You have to have tax reductions plus tax rebates, to get anything done. It won't mitigate the problem; because we did the same thing last time and nothing happened until we added tax reductions to the money we were giving.

Con.2 it does not hit the real problem

According ERIC TYMOIGNE assistant professor of economics at California State University–Fresno, the reason for the economic slowdowns is because of the stability of household finance. According to his writings in "A Hard-Nosed Look at Worsening U.S. Household Finance"," Economic growth in the past sixteen years has weighed heavily on households, "the housing market has become increasingly in a nose dive. The reason, is because, people are spending on houses, that they can't afford and because of that foreclosures happen, bankruptcy happens. This leads to inflation of money, which makes the housing market, even worse off, than it was before. The economic stimulus plan, will not work, because it does not tackle, what is causing the slowdowns. Now onto what can be done, now I know POFO can't have plans, but these are some of the options to mitigate the slowdowns. One you can inject 7% of the G.D.P. into the economy, however, this plan, is only for 1% of the G.D.P. and a lot of the stuff we buy is from foreign country, so many economists say, only half will go into the economy. Second, to improve economic policies with mortgages, and preventing subprime mortgages, which have caused these problems in the first place with making the financial institutions playing a better role with how to spend their money? Lastly raise wages, people can stimulate the economy, if they have more cash to spend because real minimum wages hikes have declined since 1998. Remember these are options, I am not advocating a plan, but these are really the policies that can be used to mitigate the housing market according to Eric Tymoigne.

Con.3 other things are going to mitigate, but not the economic stimulus act

"Staring at spreading financial dangers, the Federal Reserve announced a rescue package Tuesday that would pour as much as $200 billion (euro130.05 billion) into banks and investment houses and allow them to put up risky home-loan packages as collateral..", now what this means is the economic stimulus act is not going to mitigate, it is these other acts, that are passed. TAF has given billions since December in the hands of banks to help the real problem that is mitigating the slowdowns. So far the TAF has put 410 billion dollars into the U.S.'s economy from December 2007-till March 2008. What the Term Auction facility does is lets banks borrow from the Federal Reserve more money, the good thing about it is that it this facility could help ensure that liquidity provisions can be disseminated efficiently even when the unsecured interbank markets are under stress. Which means it can get money to many areas of the country quickly even in economic crisis or during economic slowdowns to stop the problem.

http://www.cnbc.com...
http://www.tasmanorient.co.nz...
SchinkBR

Pro

Resolved: That the Economic Stimulus Act of 2008 will successfully mitigate economic slowdowns over the next year.

Before I go into my case, I'd like to put forth some definitions to be used in this debate.

Mitigate
Make less severe or harsh;
Lessen or to try to lessen the seriousness or extent of
Success
Favorable or desired outcome

As we all have probably noticed from various news stories, our economy is currently slowing down and some people might even say that it is heading toward a recession. To stop this President Bush and our Congress passed the Economic Stimulus Act of 2008. Today my partner and I intend to prove that this Act will in fact mitigate the slowdowns.

Contention 1
Our first contention is that the tax rebates will improve our economy. My opponents will tell you that people will not spend their rebate money, but rather, that they will save it in their banks for a rainy day or until they know it will continue. I'm not going to tell you that no one will do this, but I will tell you that not everyone will save it. In fact, considering that these rebates will be going to people in the lower and middle classes, I believe that more people will spend it on things they need. Those that do spend it will obviously have an instant positive affect on the economy and will help boost our economy into a more stable situation. Furthermore, the people who bank their money will also be helping the economy. First of all, they will eventually spend that money (with interest) and thus they will eventually help the economy. In a more short term view though, they give banks more money to loan out and this again, will help boost the economy.

Contention 2
Our second contention is that the tax incentives for businesses will not only allow them to buy more supplies, but it will also provide more jobs for our economy. Approximately 50 billion dollars will be saved by businesses. Clearly this money is going to go somewhere. Businesses will use this opportunity to expand their companies. According to Rea S. Hederman, Jr., in an article titled "The House Stimulus Package: The Good and the Bad:"

"The best part of the agreement is tax cuts for businesses."Bonus depreciation," which allows companies to rapidly deduct qualified investment from their tax liability, makes new investment opportunities more profitable and attractive. This provision would increase business investment, which would create jobs and strengthen the economy.

Businesses spending more is clearly a good thing because again, that means more money is going into the economy. Also, using their new savings, businesses will be able hire more workers, which will again benefit the economy. This alone should help mitigate the economic slowdown.

Conclusion
This act is expected to put $152 billion back to nearly 128 million households and to millions of businesses. With this much money going back into the economy in one way or another, how will this act not successfully mitigate the economic slowdowns?

p.s. I'd like to ask my opponent to respond to this before Friday or until Saturday or Sunday since I will be gone Friday until Sunday night.
Debate Round No. 1
bigbass3000

Con

"Our first contention is that the tax rebates will improve our economy. My opponents will tell you that people will not spend their rebate money, but rather, that they will save it in their banks for a rainy day or until they know it will continue. I'm not going to tell you that no one will do this," , First off you have to look to two things with regards to his contention.
1)He is going off his own assumptions, while disregarding Milton Friedman's Risk Aversion theory which states people spend according to what their future income may be. Meaning if they see a Recession coming and the Government is giving aid to stop this, it will fail to get the majority to be spent. Just look to all the polls online, the majority of the rebates will be not be spent, only 23%. They are only giving it to people that are more likely to spend, but those people are in the highest debt range, so they will spend it on debt or save it.
2)Tax Rebates are proven ineffective towards Tax rate reductions, which I just showed, which he did not rebut. Do you really think a 600 rebate is going to make a big differance

Now onto his 2nd contention, the critics of the act say very simply the business incentives are there to encourage new investment, but how are they doing that when the investment is already going off. And bottomline these incentives are relatively small.

Now onto his last statement it will be 150+ billion, but tax reductions evidence proves that the rebates had a quick boost in 2001, but 2002-2003 was a stagnant economy, with almost no growth. The reason for the stimulus os to create rapid growth , not slow growth. Where is that 150 billion coming from, oooh yea the deficit. Vote Neg
SchinkBR

Pro

I'm going o start with my contentions and move to my opponents
Although only 23% of people say they plan to spend the money doesn't mean that's what will happen. You can plan all you want but as I'm sure we all know, there are things that come up that you need/want to spend money on and if you have the money, you'll spend it. Furthermore you negleted to refute my subpoint that even if people put their money in the bank, that'll still help the economy.

Now on to my second contention. First of all, $50 billion is not a small ammount of money. Though just to humor you I'll say this, how can you expect the government to put anymore money into tax rebate and incentives when we are fighting a war that cost millions of dollars a day. The economy is important, no doubt, but it's not in such a bad state that the government should start withdrawing money from other important funds. That being said, according to Rea S. Hederman, Jr., previously cited, the government "...have rejected some of the additional spending that many politicians wanted." So not all of the money has come from the deficit. But really, that is besides the point, it no longer matters where the money came from, what's done is done, what matters is how it'll help the economy.

Now to to my opponents case (which i did not refute earlier, because that's not what a first speech is for in PF)

First of all, I disagree with your second observation. The definition of mitigate, according to http://www.merriam-webster.com... is to "to make less severe" and the definition of success is "favorable or desired outcome." So basically this means that to successfully mitigate something, is to make it less worse. So for our debate all I need to do is prove that it'll slow down the economic downturn (although it will probably do more than that).

Now on to his contentions.
My opponent said that "a lot of the stuff we buy is from foreign country, so many economists say, only half will go into the economy." While we may buy "a lot of stuff" from foreign countries my opponent fails to see that the stuff is sold in the U.S. and thus those companies will see higher profits becuase of the stimulus act. He also sugested raising wages to help the economy and by this I assume he means that the minimum wage should be raised. However this will only make companies less likely to hire new people since they'll have to pay them more. What will happen is that companies will use there tax savings to give their current employees raises and hire new people because they will actually have the money to do so. His third contention is really irrelevant since there multiple things are happening at the same time there is no way to prove which thing will mitigate the economy.
Debate Round No. 2
bigbass3000

Con

I'm sorry I don't have enough time to refute your arguements I just got back from a debate tournament.
SchinkBR

Pro

That's fine, to be fair then, i won't post any type of round three argument either. How did you do in your tournament?
Debate Round No. 3
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by SchinkBR 8 years ago
SchinkBR
Yeah, I always hated when that happened, it even bothered me a little when it happened in reverse too. As for the senior/junior thing that sucks too. It happened to one of my friends this year who was an alternate last year and she switched to LD. I hope you find a good partner though, this was a good debate
Posted by bigbass3000 8 years ago
bigbass3000
I went 3-2, I kind of mad, because this one team, I went up against which we beat badly, I mean it was rape status. Beat us, I am really depressed, because I have another year to debate, but My partner doesn't.
Posted by Pluto2493 8 years ago
Pluto2493
how do you get those bullet points
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