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- Mar 5, 2008
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There is no strawman here. You claim that the GOVERNMENT, not borrowing money, and not spending money forcibly taken out of the economy through taxes, would reduce demand.
There is no further proof needed then the abject failure of "Stimulus Package". It FAILED to create demand.
There is no further proof needed then the 1929-1940's record of massive government taxation and spending driving down demand, increasing unemployment and wrecking the economy.
History shows you are DEAD WRONG in believing the myth that Government drives demand. The ONLY time that worked, was WWII, and that was a completely different animal.
Did you watch the video I provided, no? Pity you have blinders on. This is what makes you so easy to prove wrong.
And now you change your story after you get called on it. Let me quote you:
The truth is, you believe only GOVERNMENT is the answer
See, I did not say that, nor do I believe that as you state it. That is why it is in fact a straw man.
Reduced demand comes about because you have less money for those who spend the largest share, and you have no access to borrowed money. Show how you can have increased demand under those situation, both of which are a requirement for your plan.
The stimulus did in fact create demand, just not enough nor for long enough. But note the GDP growth during the period when the stimulus was most active(ie last year) compared to now.
Your plan won't work, and would devastate the economy. Even assuming that the private sector could eventually offset the loss of government spending, in the short term you would drive unemployment way up, which would further reduce demand, especially since you can no longer afford to pay unemployment benefits. Further demand reductions from those on SS and Welfare and Foodstamps and Medicare(who now have to spend all that money they would have spent on goods and services on health care). The economy crashes and would be a very long time in recovering. None of these points, which have been pointed out to you already, have you countered in any way.