The Instigator
Pro (for)
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The Contender
Con (against)
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We need to increase government spending and lower taxes

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Voting Style: Open Point System: 7 Point
Started: 4/16/2014 Category: Economics
Updated: 6 years ago Status: Post Voting Period
Viewed: 1,366 times Debate No: 52652
Debate Rounds (3)
Comments (3)
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Taxes take away from a persons paycheck and they have less money to spend the higher taxes are. If people have more income then they'll spend more on businesses and improve the economy.

Government spending is like borrowing if they don't take out taxes. This money is good to have in the economy because businesses aren't spending enough money to stimulate the economy because they're afraid of the low growth.


The very idea of this debate is near impossible. It is nearly impossible to both increase governemnt spending by lowering their income. The government would have to take out loans, and we are already in debt enough as it is. We're talking about trillions of dollars in debt. Trillions. Are you saying we should add more to that total? Because if we add more to that total, won't the economy fail even more? Won't the US Dollar be worth less? Is that really what you want?

The most logical way to get rid of debt and thus be able to increase government spending like you want seems to be to actually raise taxes. If our government fails, the economy fails.
Debate Round No. 1


Government spending comes from the money that it borrows. Government borrowing can either be from taxation, money printing, or open market operations. The government chooses to engage in open market operations to finance its borrowing. Private or international investors buy US bonds and that gives the government more money to spend. Thus, additional money is added to the economy without taking from the private sector (unless interest rates rise due to increased borrowing but this wouldn't happen during a recession.)

High government spending and low taxes are expansionary fiscal policy

Low government spending and high taxes are contractionary fiscal policy.


You have it all wrong.

Taxes are not a sub-part of government spending. Taxes are actually the main revenue for the government as of right now. Whatever money the government needs but can't get from taxes, it borrows (1) . Expansionary fiscal policy occurs when government spending exceeds tax revenue, and the government borrows money as it has no other revenue source. Contractionary fiscal policy occurs when taxes are high and government spending is low, which usually happens when a government is paying off debt (2) .

The US government is currently paying off an enormous amount of debt. Thus, it is currently on a Contractionary Fiscal Policy state. You dropped most of my arguments before, including one that stated: do you want the US debt to rise? Do you want the economy to fail like it already is? You can't spend what you don't have, and right now, the US government can't increase its debt or the government will fall.

You need to rework your math. If I run a grocery store, and I have 10 tomatoes, is it possible for me to sell 20? That is the same idea that you are getting at. I'm sorry, but this is a dreamer's argument. It is just not possible in our current state and won't be for a long time.

Your turn, Pro.

2. (Wikipedia has viable sources for everything, so thus it is a reliable source, at least it is in this debate.)
Debate Round No. 2


I never said that taxes were a sub-part of government spending. I said that taxation is one of three ways that government can borrow.

I also agree with your definitions of contractionary / expansionary fiscal policy. You've just elaborated on the simple definition I've given last round.

Answering your questions:

No, the government is not on a contractionary fiscal policy state. Our deficit is about $500 billion [1] meaning that we are still borrowing more money each year, but just borrowing less than the previous year [2], meaning that we still borrow more revenues than we get from taxes.


During a recession I want the government to have an expansionary fiscal policy. In a recession, people are afraid to spend money. This is commonly referred to as a "liquidity trap" because they expect aggregate demand to keep falling [3] so they hoard their profits. Our economy is driven by consumption / demand [4]. If people have more money, due to government spending (let's say in the form of increased gov. worker wages or new government jobs) then those people have more money to spend. More money to spend means more demand for goods and services in the economy. More demand for goods and service means that business owners need to hire more people to keep up with this new demand. By hiring more people, those people get wages and the unemployment rate drops. Okun's law states that for every 1% drop in unemployment, real GDP will be 2% higher. [5]


The economy isn't failing, but it's slowly growing. We've had about 2% GDP growth following the 2009 recession which is slower than the average historical GDP growth (about 4% per year) [6]. The way to quicken the pace of this GDP growth is to convince people who are afraid to spend money to start spending money because it causes a huge ripple effect throughout the economy like a huge wave of demand. Without this demand, businesses suffer and GDP suffers.


"The US can't increase it's debt or the government will fail." Historically, we've been in debt for years. It's simply not true to say that we'll fail because we can't increase our debt. Our debt/GDP ratio is around 103%. Our debt/GDP ratio was 120% after WWII and we successfully dropped our debt to a surplus during the Clinton administration [7]. Also, Japan has over a 200% debt/GDP ratio and they're the world's third largest economy and had passed our current debt / GDP ratio in 1999. [8]

[8] (set minimum year to 1996)

"You need to rework your math. If I run a grocery store, and I have 10 tomatoes, is it possible for me to sell 20?"

Money, unlike tomatoes, doesn't need to physically exist before using. The majority of our money is made in the computers of banks and "poofed" into existence by a digitized banking matrix [9]. The other portion of those numbers are physical dollars which hold the same value as these digital numbers because they both represent money.


Money can be borrowed on credit. If I take out a loan for my new house I don't need to pay the banker all of the money up front. I promise to pay him back in the future with interest on the initial amount that I've borrowed.

We should continue expansionary fiscal policy during a recession. As long as government spending continues to spread more money throughout the economy, there will always be more demand. Our economy is driven by demand. The reason why expansionary policy should only continue during a recession is because there's no "crowding out effect" on the private market meaning that government borrowing isn't competing with private business' ability to borrow funds because our economy isn't operating efficiently during a recession. [10]



So, for my final argument, let's point out the faults in your argument. First, the US deficit. We are not currently anywhere as low as your $500 billion estimate. We are currently at $17 trillion dollars in debt. Not billions or even millions. Trillions. Your "estimate" or whatever is horribly off. If you used an outside source for that, it must have been horribly out of date. It is true that we've always been in debt, but we have never been as low as $500 billion. It's always been in the trillions since the 1980s.

Second, money just does not "poof out of air". True, money can be made on the computer, but it takes just as long to create virtual dollars as physical dollars. In order for a currency to have worth, it has to have a limit. If the US government can just "poof" money whenever it wants, then we don't have a currency. Sorry, but that won't stand either.

You seem to be stuck on thinking like a citizen. I'm guessing that you are most likely a middle class citizen with no worries whatsoever. The only problem you have with the government is taxes, and they have to go away. First, taxes are not borrowing. You never get the money back you have. Second, well, second, let's give an example.

Let's say I know a family. They are a struggling working class family, and they use a government program called WIC to survive. They have a two year old son, and without this government program, they wouldn't be able to feed themselves or their child. If you want to cut taxes, sure you become more rich, but what about that struggling family? The WIC program would not have as much money, and they would not be able to qualify. You would want starving children to die just for what, a tax break?

The fact is, if you get a tax break, tons of programs will have to be cut. Either that, or the governent will have to take out loans. The government has already approached the debt ceiling several time. You seem to forget that the sky is not the limit, but the ceiling is. If tons of government programs are cut, the US has to cut back not only on hospitals, WIC, and food stamps, but it also has to cut back in security, including the army, navy, CIA, FBI, and more. You would rather risk the entire nation's security just so that you get a tax break? Shame.

My previous argument stands true about how the government will fall. Thus, I have proven all of your arguments wrong and forced you into a rather undesirable position.
Debate Round No. 3
3 comments have been posted on this debate. Showing 1 through 3 records.
Posted by TheNamesFizzy 5 years ago
I wish I could have voted, good job Con.
Posted by samwight 6 years ago
Your turn, MasterDebated. :P
Posted by samwight 6 years ago
Good try, MasterDebated, but it simply will not work.
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