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On January 20 2012 06:13 xDaunt wrote:Show nested quote +On January 20 2012 05:39 SkyTheUnknown wrote:
Can anyone here explain me, why Obama is seen as a bad president? Nearly everything he wanted to achieve in his presidency was blocked by Republicans. It's the biggest blockade-period by the non governing party in the history of the USA. How can you expect a president to work up to the expectations under these circumstandes? Seriously.
Here are just a few reasons that come off the top of my head. One thing I will say though is that Obama has accomplished quite a bit. 1) Obama is seen as a weak leader. He doesn't take charge of anything decisively, whether it be the stimulus package, Obamacare (oh the irony), and foreign policy (classic leader from behind). 2) People perceive that his economic policies have been failures, ranging from the stimulus package all the way to blocking the Keystone XL oil pipeline. Let's not forget about his organized labor fetish that has pissed off numerous states -- most notably South Carolina. 3) Obama has clearly failed to live up to his campaign. In fairness, though, no one can lower the seas and heal the planet as he promised. 4) Obama's fiscal spending is perceived as reckless. He's running up the debt at a record pace without even blinking an eye. 5) oh yeah... OBAMACARE. This thing is hugely unpopular. Show nested quote +On January 20 2012 05:39 SkyTheUnknown wrote:
Apart from that, I'm pretty dissapointed, that Huntsman gave up so fast. Till now he seemed to be the canditate with the smallest amount of shit around him. Perry and Ginrich are just unbearable. Santorum will never get enough votes in states which are not deeply infested by rednecks and hardcore religion parties. So there is only Romney left - a candidate, most Republicans won't be satisfied with. Just out of curiosity, is there really any non-republican who would vote for Huntsman over Obama? If so, how is Huntsman materially different from Romney?
Huntsman is a lot different than Romney. Just because he is on a similar part of the moderate spectrum and is Mormon doesn't mean he is the same person. He has a better track record as a governor, isn't a flip-flopper, has foreign relations experience, plus a lot of interesting ideas.
I don't know how people can defend Obama so fervently. He really didn't live up to much he campaigned on; the wanting to stay in Iraq longer kind of really peeves me.
source
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I want to know if there's any non-Republican who would vote Romney over Obama. Even my good friends who traditionally would vote to the right completely despise that guy.
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On January 20 2012 05:36 Xivsa wrote:Show nested quote +On January 20 2012 05:18 Undrass wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. from what I can gather, USA was already deficit spending in the "good years". when the crisis hit, they was already deep in debt. No, that's not true. Pres. Clinton (Dem.) paid down the national debt, or at least enough of it that Bush was handed a surplus upon being elected president. Bush then went ahead with tax cuts while fighting two land wars in the Middle East/Asia, all concurrently. Deficit spending was obviously necessary during his 8 years and Obama inherited not only the deficit but the financial mess from the recession.
He didn't pay down any significant amount of debt, total US debt increased every year except in the year 2000, when it decreased by about 18 billion (out of 5.6 trillion) and the economy had the dot com bubble burst at that point.
Keynesianism has the general problem that politicians won't reduce the debt. If the debt goes down, they think about increasing spending (so they can get reelected) or decreasing taxes (so they can get reelected). The desire for people to have the government debt reduced is far less than their desire to get a benefit from the government.
It might work in a capitalist dictatorship (China would be a good test case)
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On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-.
Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business.
The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack).
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On January 20 2012 07:20 allecto wrote:Show nested quote +On January 20 2012 06:13 xDaunt wrote:On January 20 2012 05:39 SkyTheUnknown wrote:
Can anyone here explain me, why Obama is seen as a bad president? Nearly everything he wanted to achieve in his presidency was blocked by Republicans. It's the biggest blockade-period by the non governing party in the history of the USA. How can you expect a president to work up to the expectations under these circumstandes? Seriously.
Here are just a few reasons that come off the top of my head. One thing I will say though is that Obama has accomplished quite a bit. 1) Obama is seen as a weak leader. He doesn't take charge of anything decisively, whether it be the stimulus package, Obamacare (oh the irony), and foreign policy (classic leader from behind). 2) People perceive that his economic policies have been failures, ranging from the stimulus package all the way to blocking the Keystone XL oil pipeline. Let's not forget about his organized labor fetish that has pissed off numerous states -- most notably South Carolina. 3) Obama has clearly failed to live up to his campaign. In fairness, though, no one can lower the seas and heal the planet as he promised. 4) Obama's fiscal spending is perceived as reckless. He's running up the debt at a record pace without even blinking an eye. 5) oh yeah... OBAMACARE. This thing is hugely unpopular. On January 20 2012 05:39 SkyTheUnknown wrote:
Apart from that, I'm pretty dissapointed, that Huntsman gave up so fast. Till now he seemed to be the canditate with the smallest amount of shit around him. Perry and Ginrich are just unbearable. Santorum will never get enough votes in states which are not deeply infested by rednecks and hardcore religion parties. So there is only Romney left - a candidate, most Republicans won't be satisfied with. Just out of curiosity, is there really any non-republican who would vote for Huntsman over Obama? If so, how is Huntsman materially different from Romney? Huntsman is a lot different than Romney. Just because he is on a similar part of the moderate spectrum and is Mormon doesn't mean he is the same person. He has a better track record as a governor, isn't a flip-flopper, has foreign relations experience, plus a lot of interesting ideas. I don't know how people can defend Obama so fervently. He really didn't live up to much he campaigned on; the wanting to stay in Iraq longer kind of really peeves me. source
One poster a few pages back said he wanted to "get rid of the worst president in history." It kind of polarizes the discussion when people (on both sides) uses these hyperbolic statements which often causes people to jump in to defend or attack him.
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On January 20 2012 07:27 Krikkitone wrote:Show nested quote +On January 20 2012 05:36 Xivsa wrote:On January 20 2012 05:18 Undrass wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. from what I can gather, USA was already deficit spending in the "good years". when the crisis hit, they was already deep in debt. No, that's not true. Pres. Clinton (Dem.) paid down the national debt, or at least enough of it that Bush was handed a surplus upon being elected president. Bush then went ahead with tax cuts while fighting two land wars in the Middle East/Asia, all concurrently. Deficit spending was obviously necessary during his 8 years and Obama inherited not only the deficit but the financial mess from the recession. He didn't pay down any significant amount of debt, total US debt increased every year except in the year 2000, when it decreased by about 18 billion (out of 5.6 trillion) and the economy had the dot com bubble burst at that point. Keynesianism has the general problem that politicians won't reduce the debt. If the debt goes down, they think about increasing spending (so they can get reelected) or decreasing taxes (so they can get reelected). The desire for people to have the government debt reduced is far less than their desire to get a benefit from the government. It might work in a capitalist dictatorship (China would be a good test case)
That's not a general problem, that's an implementation problem. It says nothing about the viability of the idea as a whole.
It's true that no country ever does what Keynes tells them to do in the good years, but the other side is just as bad, look at how every neo-liberal promises to cut taxes and spending. Cutting taxes usually happens, cutting spending never ever does, and look, there's the deficit. Republicans have a track record just as bad (if not worse) when it comes to the US debt.
Even Reagan never managed to cut spending, neither were both Bushes. If a candidate is serious about paying back the debt, no matter how you spin it, you need higher taxes. Which is why all those guys that signed the 'I won't raise taxes pledge' are complete hypocrites.
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On January 20 2012 07:27 Krikkitone wrote:Show nested quote +On January 20 2012 05:36 Xivsa wrote:On January 20 2012 05:18 Undrass wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. from what I can gather, USA was already deficit spending in the "good years". when the crisis hit, they was already deep in debt. No, that's not true. Pres. Clinton (Dem.) paid down the national debt, or at least enough of it that Bush was handed a surplus upon being elected president. Bush then went ahead with tax cuts while fighting two land wars in the Middle East/Asia, all concurrently. Deficit spending was obviously necessary during his 8 years and Obama inherited not only the deficit but the financial mess from the recession. He didn't pay down any significant amount of debt, total US debt increased every year except in the year 2000, when it decreased by about 18 billion (out of 5.6 trillion) and the economy had the dot com bubble burst at that point. Keynesianism has the general problem that politicians won't reduce the debt. If the debt goes down, they think about increasing spending (so they can get reelected) or decreasing taxes (so they can get reelected). The desire for people to have the government debt reduced is far less than their desire to get a benefit from the government. It might work in a capitalist dictatorship (China would be a good test case)
Yeah, most of that is true. I'm confusing having a budget surplus with having an overall surplus, which are two hugely different things. Clinton did pay down part of the debt no matter how 'insignificant' you call it, with most of the pay-down coming in his second term when he could not be re-elected, contradicting your claim. As for Keynes' ideas, the fact that politicians act irrationally is not a valid criticism of it. In principle, they could work. But it is true that the nature of the American government and especially its politicians work against the potential success of it.
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Why do people always claim that Obama failed to live up to his campaign promises? Financial Reform happened. Healthcare Reform happened. DADT repeal happened (bipartisanly even). Even getting out of Iraq happened. Seems to me like he did accomplish things, but people didn't think they would be nearly as slow or painful as they ended up being.
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On January 20 2012 07:54 DoubleReed wrote:
Why do people always claim that Obama failed to live up to his campaign promises? Financial Reform happened. Healthcare Reform happened. DADT repeal happened (bipartisanly even). Even getting out of Iraq happened. Seems to me like he did accomplish things, but people didn't think they would be nearly as slow or painful as they ended up being.
That's the point. He accomplished a lot of things that a majority of Americans disagree with and don't like.
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On January 20 2012 07:34 Signet wrote:Show nested quote +On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business. The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack).
Why are bad times bad? I mean what is the reason that we get into recessions?
Is it because prices are too high on some assets/goods (e.g. houses).
If prices are too high what is the obivous solution?
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On January 20 2012 07:58 xDaunt wrote:Show nested quote +On January 20 2012 07:54 DoubleReed wrote:
Why do people always claim that Obama failed to live up to his campaign promises? Financial Reform happened. Healthcare Reform happened. DADT repeal happened (bipartisanly even). Even getting out of Iraq happened. Seems to me like he did accomplish things, but people didn't think they would be nearly as slow or painful as they ended up being. That's the point. He accomplished a lot of things that a majority of Americans disagree with and don't like.
None of that except DADT happened.
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On January 20 2012 08:07 Hider wrote:Show nested quote +On January 20 2012 07:34 Signet wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business. The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack). Why are bad times bad? I mean what is the reason that we get into recessions? Is it because prices are too high on some assets/goods (e.g. houses). If prices are too high what is the obivous solution?
Go read up on the business cycle. There are a lot of theories, but basically it's a natural incidence of economies.
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On January 20 2012 08:19 xDaunt wrote:Show nested quote +On January 20 2012 08:07 Hider wrote:On January 20 2012 07:34 Signet wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business. The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack). Why are bad times bad? I mean what is the reason that we get into recessions? Is it because prices are too high on some assets/goods (e.g. houses). If prices are too high what is the obivous solution? Go read up on the business cycle. There are a lot of theories, but basically it's a natural incidence of economies.
There are a lot of different theories which has different explanations. But this is not what I am askin here. I am asking whether prices were too high back in 07 or if they weren't.
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On January 20 2012 08:25 Hider wrote:Show nested quote +On January 20 2012 08:19 xDaunt wrote:On January 20 2012 08:07 Hider wrote:On January 20 2012 07:34 Signet wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business. The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack). Why are bad times bad? I mean what is the reason that we get into recessions? Is it because prices are too high on some assets/goods (e.g. houses). If prices are too high what is the obivous solution? Go read up on the business cycle. There are a lot of theories, but basically it's a natural incidence of economies. There are a lot of different theories which has different explanations. But this is not what I am askin here. I am asking whether prices were too high back in 07 or if they weren't.
Yes, housing prices (among others) were too high as a result of overly-expanded credit.
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On January 20 2012 08:28 xDaunt wrote:Show nested quote +On January 20 2012 08:25 Hider wrote:On January 20 2012 08:19 xDaunt wrote:On January 20 2012 08:07 Hider wrote:On January 20 2012 07:34 Signet wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. Yes, even if it doesn't "fix" the economy, the idea of running surpluses during good years and deficits during bad years (countercyclical macro-stabilization) makes some sense, like a rainy day fund for a family or business. The problem is that there isn't much incentive to run the necessary surpluses to properly implement this policy. The fact that the campaign season basically never stops anymore may be a contributing factor (anybody who makes a necessary but unpopular spending cut or tax increase opens themselves up to immediate campaign attack). Why are bad times bad? I mean what is the reason that we get into recessions? Is it because prices are too high on some assets/goods (e.g. houses). If prices are too high what is the obivous solution? Go read up on the business cycle. There are a lot of theories, but basically it's a natural incidence of economies. There are a lot of different theories which has different explanations. But this is not what I am askin here. I am asking whether prices were too high back in 07 or if they weren't. Yes, housing prices (among others) were too high as a result of overly-expanded credit.
So what is the solution if prices are too high?
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On January 20 2012 08:17 Roe wrote:Show nested quote +On January 20 2012 07:58 xDaunt wrote:On January 20 2012 07:54 DoubleReed wrote:
Why do people always claim that Obama failed to live up to his campaign promises? Financial Reform happened. Healthcare Reform happened. DADT repeal happened (bipartisanly even). Even getting out of Iraq happened. Seems to me like he did accomplish things, but people didn't think they would be nearly as slow or painful as they ended up being. That's the point. He accomplished a lot of things that a majority of Americans disagree with and don't like. None of that except DADT happened.
Do you blackout for months at a time? Most of those things took months of painful media spinning and bullshit to get through. You don't get to claim now that that never happened.
The policies may not be what America had in mind or whatever, but don't try to claim they never happened.
So xDaunt, do you agree that he fulfilled his campaign promises or not?
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On January 20 2012 07:36 Derez wrote:Show nested quote +On January 20 2012 07:27 Krikkitone wrote:On January 20 2012 05:36 Xivsa wrote:On January 20 2012 05:18 Undrass wrote:On January 20 2012 05:14 Velr wrote:
I don't want to "protect" the keynesian idelogy (i prefer it over austrians but i also prefer breaking my leg over breaking my arm).
last time i checked keynesian are supposed to save up money/payback their debt during times of growth (and invest during bad times..).
Next to no country has done that.
This crisis has not that much to do with Keynesian logic, because there never was a truely Keynesian system involved.
But at least we can now be sure about 1 thing:
Just spending at infinitum leads to crashes/crisis.. Who would have thought -.-. from what I can gather, USA was already deficit spending in the "good years". when the crisis hit, they was already deep in debt. No, that's not true. Pres. Clinton (Dem.) paid down the national debt, or at least enough of it that Bush was handed a surplus upon being elected president. Bush then went ahead with tax cuts while fighting two land wars in the Middle East/Asia, all concurrently. Deficit spending was obviously necessary during his 8 years and Obama inherited not only the deficit but the financial mess from the recession. He didn't pay down any significant amount of debt, total US debt increased every year except in the year 2000, when it decreased by about 18 billion (out of 5.6 trillion) and the economy had the dot com bubble burst at that point. Keynesianism has the general problem that politicians won't reduce the debt. If the debt goes down, they think about increasing spending (so they can get reelected) or decreasing taxes (so they can get reelected). The desire for people to have the government debt reduced is far less than their desire to get a benefit from the government. It might work in a capitalist dictatorship (China would be a good test case) That's not a general problem, that's an implementation problem. It says nothing about the viability of the idea as a whole. It's true that no country ever does what Keynes tells them to do in the good years, but the other side is just as bad, look at how every neo-liberal promises to cut taxes and spending. Cutting taxes usually happens, cutting spending never ever does, and look, there's the deficit. Republicans have a track record just as bad (if not worse) when it comes to the US debt. Even Reagan never managed to cut spending, neither were both Bushes. If a candidate is serious about paying back the debt, no matter how you spin it, you need higher taxes. Which is why all those guys that signed the 'I won't raise taxes pledge' are complete hypocrites.
Actually US debt wise it depends on who you look at, President or Congress,,, under Clinton the budget was balanced for 1 year (2000) but it was under a Republican Congress.
Also, you don't necessarily need higher taxes, you need higher taxes OR lower spending. And Higher taxes don't necessarily mean higher tax rates.. it means higher revenues.
The problem is (generally) Republicans want to cut tax rates/raise military spending more than they want to cut social spending. And Democrats want to raise social spending more than they want to raise tax rates/cut military spending.
Either approach (low tax-low spend or high tax-high spend) will balance the budget if done. The problem is democracies tend towards low tax-high spend, since there are different philosophies, and the most appealing part is what gets through.
Applies to all democracies that are not awash in cash and without an unusually strong anti-debt culture.
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Its always they same shit. Obama gets flamed for a bad economy when the fact of the matter is that he came into office when the economy had been destroyed by Bush. Its the same concept here in Sweden. The Moderates get credit for the sound finances in our government when the truth is that they got it handed on a silver plate because of the job the socialist democrats had done before them.
What annoys me is that the media always forgets who was in office before and what you have to work with when you get into office.
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On January 20 2012 08:43 Fjodorov wrote:
Its always they same shit. Obama gets flamed for a bad economy when the fact of the matter is that he came into office when the economy had been destroyed by Bush. Its the same concept here in Sweden. The Moderates get credit for the sound finances in our government when the truth is that they got it handed on a silver plate because of the job the socialist democrats had done before them.
What annoys me is that the media always forgets who was in office before and what you have to work with when you get into office.
Well really the President doesn't have that much control of the economy, even in an entire term.
The President and Congress combined have somewhat more, but there are a lot of other factors.
(of course that's why this is a big election, chances are the economy will improve by 2016 regardless of who is elected, and that group will get credit)
If a Republican gets elected then they will probably be able to ride the coming boom until 2020 when another collapse comes.
If Obama is relected, than 2016 will be interesting because it will help determine who gets blamed for the 2020 collapse
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United States23455 Posts
Just a little course of why Obama is continuing to spend, even though it is driving up the deficit.
1. The programs he's spending on are important in various ways (I'm not saying indispensable, but mostly important)
2. (This might take a bit). The reason he is demanding high government expenditures is that we are still in a recessionary gap where consumer spending is lower then desired. Government spending is affected by what is called the multiplier. This basically means that for each dollar the government spends, That dollar times the multiplier (a very complex number derived from a very complex equation that I'm afraid to say I'm underqualified as an economist to accurately predict) will be the increase in consumer spending. For example, if the multiplier was 3, then that one dollar of government spending would increase consumer spending by three dollars. The more consumer spending, the faster we get out of a recession. Basically the goal is to increase the aggregate demand (or the demand of everyone in the country for goods and services).
On the flip side, Republicans favor tax cuts for businesses. THIS IS NOT JUST BECAUSE THEY FAVOR THE RICH. The reason they cut taxes for corporations is that lower taxes allows businesses to hire more people, which in theory creates more American jobs. Eventually these tax cuts on businesses "trickle down" into the pockets of workers for those companies through wages. This also increases consumer spending and aggregate demand, just like government spending. However, The multiplier (remember the multiplier?  ) does not effect tax cuts as much as government spending does. Therefore the Democrats argue the fact that it is proven that government spending increases aggregate demand and consumer spending by more then tax cuts. Why, then can Republicans still argue that tax cuts are better? Well, because of aggregate supply.
Aggregate supply is the total amount of goods and services in an economy. Tax cuts cause increases in aggregate supply that government spending does not. For example, capital gains tax cuts will cause a business to invest in more capital (in this context, capital is basically business infrastructure for producing goods, such as machines for a manufacturing plant). This increase in capital investment will increase the supply of goods in the economy. Republicans argue that this makes up for the fact that Government spending produces more aggregate demand. Continued -------->
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EPT
