Which of these would lower the deficit more?

[Kurt_and_Hunter]

Which of these would lower the deficit in 2013 more? (And lower the total debt in 2020 more?)

[yurbud]

1. explain the joke

[Kurt_and_Hunter]

3. No joke

Government spending has not gone up all that much. The deficit is through the roof because federal revenues have declined 1.1 trillion.

The only way to close the deficit is a strong economy -- more taxable activity.

Everything we know from history and current events agrees that cutting the deficit right now will cause the economy to get worse.

We cannot cut our way to fiscal order. We have to grow our way out of it.

So assuming the economy isn't going to go off on a tear on its own next year then the best bet is to keeping hitting it until something catches.

We have serious fiscal problems but cannot possibly address them in a low-growth environment.


It's counter-intuitive, but that's Keynesian economics for you. It has always faced resistance from seeming common-sense.

[yurbud]

5. Democrats have not declared bullshit on Reaganomics directly enough

and signaled a switch back to a keynesian approach.

Worse, they haven't taken enough actions that look like that.

[TexasObserver]

9. Correct!

[DJ13]

2. I clicked other, but I think the answer is increasing the deficit in 2011

The only effective way to lower deficits in the long run is to increase spending now in order to stimulate growth.

Growth is the only real means of decreasing the deficit.

Reducing spending only leads to a lower standard of living, which results in lower tax revenues leading to further cuts, in an endless chasing our tail scenario that wont really solve the deficit issue.

[Kurt_and_Hunter]

4. Correct. Our problem is on the revenue side

Federal revenues are highly sensitive to GDP growth.

Unless we manage to get the economy growing at a decent steady pace somehow it is a joke to talk about closing the deficit.

And of the two options in the OP, greater deficit spending short-term is a zillion times more likely to create revenue (over and above the cost) than the alternative.

New short-term deficit spending might not work but at least it isn't guaranteed to fail.

Cutting the budget (or raising taxes) in this environment will slow the economy more, decreasing revenues while increasing demand on things like medicaid and unemployment insurance.

[Warpy]

6. Every dollar the government puts into the economy generates

something like $1.73 in overall results. Cutting the deficit takes money out of the economy, a good thing in a roaring economy but a self defeating thing in a bad economy.

If deficit hawks would focus on the bloated Pentagon budget and the squandering of billions every year on overengineered stuff that looks good on paper but which no one but the contractors and their pet congressmen want, then we could have the best of both worlds.

Unfortunately, deficit hawks are also military hawks who rely on fat defense contracts in their districts as proof they're doing their job for the little people and will shriek like castrati if anybody touches their sacred five sided cash cow.

[customerserviceguy]

7. Voted for decreasing

When you're in a hole, stop digging.

If employer confidence doesn't come back, jobs don't either.

[Wwagsthedog]

8. Stop the damned wars!

[deacon]

10. Do away with minimum wage and increase the tax cut for the top 1%!

How could that go wrong?! :sarcasm: