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Taxes or Spending: is there a difference?

Yes, there can be a difference to the overall economy.  It depends on what is done with the tax cuts.  Generally, both can stay and stimulate the economy.  But, if the taxes cuts are used to pay off bank debt, this reduces the amount of money in circulation.  This is very harmful in a declining economy.  Direct government spending keeps money in circulation.  Usually in this type of great recession total debt is being reduced by corporations and individuals harming the overall economy.  The real solution is overall monetary reform but in absence of this debate, Federal fiscal spending is mandatory.  The question is when to reduce or stop it.  The answer is when the economy starts significant growth.   It was stopped prematurely in the U.S. in 1937 and Japan in 1997 causing significant downturns.  Currently, it is keeping us out of a great depression!

 


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