April topic for POFOers only take if you are in POFO.

First I'd like to refute my opponents case, then briefly form my own regarding the economic stimulus package. For definitional purposes and observations I agree with my opponents standards, but ask that we clarify that we are not regarding the start of FY 2009, but actual 2009. My opponents first claim is that the economic stimulus pack will actually further harm the economic slowdown America is currently receiving. He makes several claims, and for clarification purposes I will outline his essential arguments. 1. Spending from tax rebates (and the rebates themselves) will weaken the value of the dollar. 2. Gas prices will ultimately rise due to a rising dollar. 3. Massive inflation will result, and America's economy can't sustain this. First, inflation on it's own is not necessarily an end all be all problem; in fact some inflation is good and necessary, it means growth. Marginal inflation thus isn't a problem, so keep this in mind. The argument holds that to fulfill this rebate, America will have to borrow currency from foreign investors, and as the international monetary market runs, investors value currency less as the debt increases. This would be true if this were how rebates work. If you recall in 2003, the rebates sent out for an average of $600 were given to Americans, but the very next tax year Americans had that 600 added to their tax returns. Essentially, the government forwarded a tax break to people now, which they would soon pay off. What this boils down to is two simple facts. First, little if any debt results from rebates because they are paid off by the tax payer, not a creation of currency. Second, any debt that does somehow result is quickly paid off, and is such a negligible amount that its' irrelevant on the international market. Since my opponents first major claim is proven incorrect, his further logic fails. Next my opponent argues essentially that investment will be harmed from the plan; he is quite wrong, and see my first contention to see why. Finally, he argues the "global" economy will be harmed. There are two responses to this argument, the logical fallacy argument, and the further explanation argument. Here they are: first my opponent assumes major debt increases, which is flawed, but also he argues non-resolutional. The resolution specifies U.S. downturn, not global. Further, if he attempts to argue that the U.S. downturn would harm the global economy, which will harm the U.S., the argument is circular and thus logically fallacious. Next, let's assume that foreign debt results (which in this debate I do not generally concede) What is this impact? Is foreign debt holding bad or good? Let's look to Alan Greenspan in his book, The Age of Turbulence. He argues, as an economist and not a journalist, that foreign investment is good because the interest off the debt has a multiplier effect into the economy, and the major countries who hold US debt are also major importers of US products, so specified to their currency, US products are more valuable. This proves my opponents line of logic incorrect. Next, why the stimulus package will result in economic growth that meets my opponents criterion. 1. Investment will increase MPS (marginal propensity to save) will increase In response to my opponents claim, investment will actually increase; here's why: the MPS is increased with tax rebates, as seen in 2003. When the MPS increases, the loanable funds market has more funds, which increases investment and lowers interest rates. This impact is that lenders will have more liquidity, and lower interest rates, without inflation since currency is not created, instead is it adjusted and dispersed in a discretionary manner. The impact of this is that the housing market will be further settled, as lenders can begin to settle mortgages, and less large banks will need federal funds. (See Bear Sterns) Also, the increase in investment will have a multiplier effect on the economy, and when looking to the multiplier accelerator theory, an increase in the MPS is one of the greatest multipliers. The major problems in today's economy are a lack of spending, a lack of investment, and a housing market problem. An increase in the MPS resulting from tax rebates addresses all these problems. This point alone outweighs my opponents major claims. After the refutations and the resulting factors seen from an increase in the MPS, the economic stimulus package will mitigate the economic downturn, by counteracting it.