Government spending helps the economy during a recession

Con: "My opponent stars off by saying that if people have more money than they will spend more. This is not true, As I said before, if the government increases spending then they have to increase taxes. "It's not clear what my opponent is arguing here. Is he saying that it isn't true that if people have more money they will not spend more? MPC: In economics, the marginal propensity to consume (MPC) is a metric that quantifies induced consumption, the concept that the increase in personal consumer spending (consumption) occurs with an increase in disposable income (income after taxes and transfers). - Google. Or is my opponent arguing that it is true but government must increase taxes to offset spending? I've already covered this in the previous round. Have we seen a marginal increase in taxes for every marginal increase in government spending over the last decade? Of course not. Under George Bush's presidency he substantially increased government spending but taxes didn't increase. My opponent argues that government loans are "much, much more harmful than any recession" but goes on to say "This debt puts an immense pressure on the economy, even if the effects are not visible at the present. " So basically he supports his assertion that the national debt is harmful by the absence of any harmful effects. The US government does have to pay interest on borrowed money but we've increased our money supply substantially. We've borrowed X amount and X amount is due with interest but we've simply just printed more money. Our dollar is backed by nothing. It's fiat money. The only value our dollar has is the confidence that our dollar is worth something. So when we repay our debt with interest, more of our currency is demanded and held by foreigners. Demand for our currency increases the value of the dollar. It's really a significant benefit to be the world's reserve currency. My opponent brings up that debt causes inflation. He then says "Yes, inflation itself hasnt increased very much, but it still exists. This average inflation of 4% puts pressure on the economy. " First, his assertion that the debt causes inflation is supported by our lack of any substantial inflation and secondly, he says that 4% inflation puts pressure on the economy. Actually inflation MUST exist. The way we create money is by fractional reserve banking. If there was 0 inflation we wouldn't increase the money supply enough to pay interest with the system in effect. The Fed reserve sets monetary policy so let's see what inflation should be: " The Federal Open Market Committee (FOMC) judges that inflation at the rate of 2 percent (as measured by the annual change in the price index for personal consumption expenditures, or PCE) is most consistent over the longer run with the Federal Reserve's mandate for price stability and maximum employment. " - GoogleWhat has inflation been like the past year? "The latest annual inflation rate for the United States is 1.3% through the 12 months ended November 2014, as published by the US government on December 17, 2014. ". http://www.usinflationcalculator.com... So actually we don't even have enough inflation! My opponent continues his argument with the belief that any marginal increase in government spending must equal a marginal increase in taxation. This is just false. If this were the case our national debt would be 0. The whole reason for deficit spending is that it's spending beyong what is collected in tax revenue. My opponent likens the US economy to the hyperinflation era of Nazi Germany. This is just laughable because inflation is minimal and the dollar is the most demanded currency by a large margin. I'll end this debate by saying that I have shown government spending helps the US economy for multiple reasons. (1) The money multiplier effect shows that for every dollar that the government spends, more revenue is created beyond the initial amount spent. This increases GDP in the long run given that GDP = C + I + G + NX where G = government spending. I have also given economic rationale behind why this occurs (the more money someone has, the more they demand. The more people demand the more business revenue businesses collect and must hire more people to keep up with demand. By hiring people to keep up with demand unemployment drops and for every 1% decrease in unemployment a 3% increase in GNP occurs according to Okun's law. )(2) I have shown that inflation or lost faith in the dollar as a result of government spending and accumulation of national debt is bogus given the data.