The stimulus bill will succeed

Alright, first off I will address what the stimulus bill actually is. My opponent seems to address what the bill is doing, not what it is supposed to do. The original goals of the bill were to: -Make more jobs -Put money into the hands of the middle/lower class -Increase consumer spending -Spend money now in an effort to save in the long run I am arguing that the stimulus bill will fail to achieve all of its goals. My opponent seems to agree with me to an extent that it is failing already, so negating should be easy. Here is why you should: The size of the first stimulus bill of 2008 was $150 billion, with more than $100 billion in tax rebates mailed to American individuals and house holds. This rebate was based on the assumption that people would immediately spend this rebate and thereby boost the economy. The bill was a failure because it merely shifted income from one sector of the economy to another. The government cannot create new purchasing power or dollars; it can only change the allocation of dollars. To create the rebates, then, government had to take money away from another part of the economy. While the tax rebate may have boosted some consumption in the second quarter of fiscal year (FY) 2008, only a small part of the rebate checks were spent. As mainstream economic the ory would predict, large portions of the rebates were likely saved or used to pay down debt. As housing prices continue to fall, unemploy ment continues to rise, and financial markets con tinue to shed valueless assets, the failure of the first stimulus bill becomes more and more apparent. Rebates failed in the 1970s, 2001, and again in 2008. Unfortunately, Congress is attempting to repeat this same failed experiment of income shifts and temporary spending increases. Over the summer, congressional leaders called for a second stimulus package to strengthen the economy. The Chairman of the Senate Appropria tions Committee, Senator Robert Byrd (D–WV), released details of a Senate version likely to be debated this month. This bill focuses largely on infrastructure and disaster recovery projects, but will do little to stimulate the economy in the near future. The initial Byrd proposal was $25 billion, but already there are calls to double or triple that amount. Senator Byrd's initial proposal contained $10 billion for infrastructure, energy, and economic recovery, the bulk of which would be spent on addi tional highway funding; $10.1 billion for additional natural disaster relief, much of which is allocated for victims of Hurricane Katrina, which occurred over three years ago; and $4.04 billion is spread across a wide range of programs, including money for NASA and other programs that are usually part of the annual appropriations process instead of an eco nomic recovery bill. The problem with Byrd's stimulus proposal is that it is a return to failed policies. History has shown that expanded government reduces producï¿½tivity and economic growth. Massive Keynesian spending hikes in the 1930s, 1960s, and 1970s all failed to increase economic growth rates. Yet in the 1980s and 1990s—when the federal government shrank by nearly 20 percent of gross domestic product (GDP)—the U.S. economy enjoyed its greatest expansion ever. Spending-stimulus advocates claim that govern ment can "inject" new money into the economy, increasing demand and therefore production. But that assumes Congress has a vault of money sitting there waiting to be distributed. In reality, every dol lar that government "injects" into the economy must first be taxed or borrowed from the economy. No new spending power is created. It is merely redistributed from one group of people to another. Spending-stimulus advocates typically respond that redistributing money from "savers" to "spend ers" will lead to additional spending. That assumes that savers store their savings in their mattresses, thereby removing it from the economy. In reality, nearly all Americans either invest their savings (which finances business investment) or deposit it in banks (which quickly lend it to other customers to spend). Therefore, the money is spent regardless of whether it is initially consumed or saved. This does not mean that government spending has no economic impact at all. Economic growth requires productivity growth, and policies that alter productivity rates will accordingly alter the amount of economic output. In other words, government spending cannot significantly affect demand since it merely redistributes existing purchasing power, but it can alter supply by altering the productivity rates of people and businesses. And that effect is mostly negative. History has shown that most government spending reduces pro ductivity and economic growth. Most government spending reduces economic growth due to: Taxes. Government spending is financed by taxes, and high tax rates reduce incentives to work, save, and invest; Reduced incentives. Social spending often reduces incentives for productivity by subsidiz ing leisure and unemployment; Displacement. Every dollar spent by politicians means one dollar less that is allocated based on market forces within the more productive pri vate sector; and Inefficiencies. Government programs are less efficient than those in the private sector. As you can see, the bill fails to do what it was designed to do. For this reason, you must negate the resolution. Thank you. http://americanaffairs.suite101.com... http://www.unionleader.com...'s+the+point%3F+The+stimulus+bill's+real+goal&articleId=3dd9deb7-b109-4694-8fec-3d7b25c08dea