POFO debaters, April topic. POFO debaters only please.

Practice for Nat quals Resolved: That the Economic Stimulus Act of 2008 will successfully mitigate economic slowdowns over the next year. Observation 1-The affirmative must prove that the economic stimulus act by itself will mitigate not any other corresponding policies such as Term Auction Facility Observation 2-The resolution is that the economic stimulus act will successfully mitigate the economic down turn in the next year. You do not win simply by showing that there was some mitigation. If the government spends enough money it's sure to have some effect. It has to be successful mitigation. That means that the stimulus act has to meet the expectations/goals of those that advocated and passed it. And it has to do that in the next year 2009. Con.1 Tax rebates Vs. Tax reductions Back in 2001, we had the same type of idea proposed by Bush, to give rebates to the economy to stimulate the economy, but what you must understand is this idea did not work until tax reductions across the board. According to Brian M. Riedl, "Tax cuts vs. tax rebates," Washington Times, January 16, 2008. " •Critics contend that rebates "inject" new money into the economy, increasing demand and therefore production. •But every dollar that government rebates "inject" into the economy must first be taxed or borrowed out of the economy (and even money borrowed from foreigners reduces net exports). •No new spending power is created; it is merely redistributed from one group of people to another. Take the 2001 tax rebates, for example: •Washington borrowed billions from the capital markets, and then mailed it to families in the form of $600 checks. •Predictably, consumer spending temporarily rose, and capital/investment spending temporarily fell by a corresponding amount. •This simple transfer of existing wealth did not encourage productive behavior; the economy remained stagnant through 2001 and much of 2002. It was not until the 2003 tax cuts -- which instead cut tax rates for workers and investors -- which the economy finally and immediately recovered: •In the previous 18 months, businesses investment had plummeted, the stock market had dropped 18 percent, and the economy had lost 616,000 jobs. •In the 18 months after the 2003 tax rate reductions, business investment surged, the stock market leaped 32 percent, and the economy created 5.3 million new jobs; overall economic growth doubled. ", What this means is that even though the rebates will go in, because the Government has to take money to give money, it does not do anything. You have to have tax reductions plus tax rebates, to get anything done. It won't mitigate the problem; because we did the same thing last time and nothing happened until we added tax reductions to the money we were giving. Con.2 it does not hit the real problem According ERIC TYMOIGNE assistant professor of economics at California State University–Fresno, the reason for the economic slowdowns is because of the stability of household finance. According to his writings in "A Hard-Nosed Look at Worsening U.S. Household Finance"," Economic growth in the past sixteen years has weighed heavily on households, "the housing market has become increasingly in a nose dive. The reason, is because, people are spending on houses, that they can't afford and because of that foreclosures happen, bankruptcy happens. This leads to inflation of money, which makes the housing market, even worse off, than it was before. The economic stimulus plan, will not work, because it does not tackle, what is causing the slowdowns. Now onto what can be done, now I know POFO can't have plans, but these are some of the options to mitigate the slowdowns. One you can inject 7% of the G.D.P. into the economy, however, this plan, is only for 1% of the G.D.P. and a lot of the stuff we buy is from foreign country, so many economists say, only half will go into the economy. Second, to improve economic policies with mortgages, and preventing subprime mortgages, which have caused these problems in the first place with making the financial institutions playing a better role with how to spend their money? Lastly raise wages, people can stimulate the economy, if they have more cash to spend because real minimum wages hikes have declined since 1998. Remember these are options, I am not advocating a plan, but these are really the policies that can be used to mitigate the housing market according to Eric Tymoigne. Con.3 other things are going to mitigate, but not the economic stimulus act "Staring at spreading financial dangers, the Federal Reserve announced a rescue package Tuesday that would pour as much as $200 billion (euro130.05 billion) into banks and investment houses and allow them to put up risky home-loan packages as collateral..", now what this means is the economic stimulus act is not going to mitigate, it is these other acts, that are passed. TAF has given billions since December in the hands of banks to help the real problem that is mitigating the slowdowns. So far the TAF has put 410 billion dollars into the U.S.'s economy from December 2007-till March 2008. What the Term Auction facility does is lets banks borrow from the Federal Reserve more money, the good thing about it is that it this facility could help ensure that liquidity provisions can be disseminated efficiently even when the unsecured interbank markets are under stress. Which means it can get money to many areas of the country quickly even in economic crisis or during economic slowdowns to stop the problem. http://www.cnbc.com... http://www.tasmanorient.co.nz...