Government Stimulus Is the Best Way to Get Out of a Recession

I will give my rebuttal in the order of Pro's points listed. 1; The aim of government stimulus in this case is to escape recession, as swiftly and as beneficially as possible. What happens afterwards is of little importance to this topic. If a recession is a decline in economic activity, and saving does not cause economic activity, rather, the inverse. When wage rates decrease as you have explained as part of your plan for escape (a la Adam Smith), you forget that as the wages of employees decrease, they spend and save less, lowering both economic activity and saving. This system may work, but it is hardly a beneficial system to those who experience the lower wages. 2; Firstly; Round 1: Presentation all arguments by con Round 2: Presentation of arguments by pro and rebuttal by con Round 3: Rebuttal by pro and defense of original arguments by con Round 4: Defense of original argument by pro. To make for an even number of rounds between both debates, con should only post, "No argument will be posted here as agreed." Surely the Broken Window Fallacy belonged in round 3, but regardless, creating a deficit is not the end of the world. Most countries will always owe some other country, all that is required is to pay the interest at least. Now, the debate topic is Government Stimulus Is the Best Way to Get Out of a Recession, not that it is the best way to promote long term growth. If I had to make an analogy, it would be that a stimulus is like a cortisone (steroid) where saving is simply having a balanced diet. In a recession (a medical emergency), you need the more extreme and short term solution to minimize short term suffering. By giving industries a boost to restart economic activities, you begin the circular flow of money once more and money begins to flow again, the multiplier effect creating new wealth. 3; I would say that America is a bad example for this debate. Firstly, the amount of debt in America is far greater than any other debt in the world, increasing by the thousands every second. This debt was mainly the product of several long term wars and is such a seriously massive debt that I dare call their condition depression, or at least it will be in the future. The issue is that nothing can get America out of its debt (save for a default or a write off), so the American Government will never have capital saved, always requiring it for spending. To save this money, they will need to either increase income or cut spending. To earn money, you will need to first supply money, (a cash injection), which does not fit into savings, so the next option, cutting spending must be used. In the previous example I gave, Austerity was not an optimal solution, and caused a great deal of hardship upon the Irish population. America is not a proper example due to the immense scale of its debt, which no mortal power can remove within a human lifetime. http://www.brillig.com... All in all, I would say the debate comes down to rival economic theories. Adam Smith as your economist and John Maynard Keynes as mine. As the saying goes, if you took every economist in the world, and lined them up head to foot, you still wouldn't reach a conclusion. See you next round, Duncan