Resolved: Deficit Spending does more harm than good.

For this round I shall be going over three contentions on two main aspects of stimulas and then move on to status quo deficit spending.Contention 1: Monetary StimulasMonetary stimulas is quite key in many things as in 2008 during the subprime crisis, Federal Reserve Chairman Ben Bernake created a stimulas that far surpassed that of the Federal Government's TARP, which I'll get into TARP later on. Bernake saw the issue in the economy needed a huge fix and it was obvious that he needed to supply credit, not liquidity [1]. The Monetary policy had many types of stimulas, but none more effective, by far, than the Quantitiative Easing (QE from this point forward). During QE1, the Federal Reserve purchased US treasury bonds that were morgaged based bringing totals up to nearly $2 trillion [2]. This was important as the Federal Reserve had no choice, but to buy these toxic assets as many banks began to go under. Much of these toxic assets were grouped together in CDS, which these toxic assets and bad mortgages were packaged and sold off to other banks as well as other companies. When Lehman Brother's went under, the Fed jumped in and began to start buying these toxic assets. Many of these came from Freddie and Fannie Mae's Mortgage Backed Securities (MBS). In QE3, the Federal Reserve has increased purchasing MBS and GSE (Government Sponsered Enterprises) debt increased to $85 billion per month and this would continue until the markets recovered. To this point, the Federal Reserve's total holding are at $4.4 trillion by the end of 2014 [3]. US unemployment has fallen from 10% to now around 5% by the end of 2014 [4]. Unlike many critics speculation, QE did not lead to the hyperinflation that many had feared as the US economy began to recover. In the purchasing of the toxic assets and public debt, it enfused credit into the markets leading to an increase in AD which is the number 1 driver of the economy as nearly everything and all paths to recovery revolves around the AD and as the public spending increases, it sepdns signals to the consumers that the economy is beginning to recover and they can feel safe to begin continuation of consumer spending and making investments. This has helped pave the pathway to recovery that Free Market policy wouldn't be able to even come close to such a safe recovery as we would have likely have been plunged into another Great Depression as world markets were all beginning to fail. Contention 2: Fiscal StimulasMuch of the Republicans have cried foul when the TARP bill was passed, but then blamed Obama when the bill wasn't enough and the economy was in shambles. The thing was, TARP wasn't enough. Economist Paul Krugman stated that the US economy could produce $30 trillion in a year, but under the crisis, the US under produced well under 6.5%. The TARP bill tried to fix a multi trillion dollar problem and came no where close to enough [5]. If you are blaming the slow recovery on Stimulas Spending, then you are in the wrong as there simply wasn't enough of a deficiet undertaken in order to actually fix the problem as many Republicans were going to road block this bill if a higher amount was purposed. A huge question purposed that many people on the right can't answer is what can we do to increase jobs under a recession? We simply can't sit back and do nothing. What needs to be done, as brought up before, is the encouragement of public spending as well as increase consumer spending. Contrary to the "hole digger" jobs that many think only came out the FDR's New Deal, the US Federal Government helped build the TVA, 2,500 hosptials, 45,000 schools, 7,800 bridges, 700,000 miles of road, and employed 5,000 teachers [6]. Hoover refused to go into debt in order to get the US out of the Great Depression, but he declined to do so. FDR employed over 60% of the unemployed population as well as he reduced unemployment from 25% in 1933 to 9.6% in 1936. All in all, FDR took the unemployment rate from nearly 40% down under 5%. A key thing about fiscal spending in situations like this is that it gives people who would normally not have any money, a paycheck which can be re-entered into the economy through spending which gives more people jobs and helps the economy recover. This was done with new programs like Welfare and Social Security, so now grandparents didn't have to move in with their children as it would put of burden on them forcing them to spend less. Contention 3: A Balanced Budget won't work.Unlike many Conservatives say, cutting the budget will only hurt the economy. Economist John Maynard Keynes had argued that the government is a multiplier for growth and their public spending would generate demand. This is important in this debate as the further we go into debt, the better our economy will be. Now I'm not saying we should spend endlessly, but we definately should not only go and spend very little or what we have as income for our government. Doing this would extremely harm us. Sequester also showed that this was an issue as more spending was cut, we saw unemployment rise as well as damage our economy [7]. Our recovery that was well within reach was slowed and it would have been much faster. A huge example of this was when the Republicans tried to shift Medicade into a voucher system and even though it looks good on paper with a shifting of a few Trillion, but when everything and said and done, the program's cost will balloon to $34 trillion which makes things worse on the private sector [8]. You could just argue that the current US budget is fine where it is. The USFG makes about $1.1 trillion per year, but spends $3.3 trillion per year [9]. This means in order to ballence the USFG would need to shrink its spending to a third of its size. Shrinking the budget this size would destroy the economy. Sources1. (http://www.sjsu.edu...) 2. (http://www.academia.edu...) 3. (http://www.heritage.org...) 4. ( https://www.theguardian.com...) 5. (http://www.nytimes.com...) 6. (http://rooseveltinstitute.org...) 7. (https://www.washingtonpost.com...) 8. (http://www.huffingtonpost.com...) 9. (https://www.nationalpriorities.org...)