phillyhangin
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But I also pointed out that if we cut too much too soon, we're not actually saving money because the people whose jobs are lost due to the spending cuts will simply end up collecting unemployment if there are no replacement jobs for them to go to, so the government spending just gets shifted from column A to column B.No the key is not higher government spending.
You properly pointed out that in order to maintain a higher level of spending that taxes have to increase (not happening unless I'm missing something - at the point of the original video posted is that we cannot raise taxes enough to support the high spending rate)
I'm not actually advocating increasing the tax rate, btw; just not dropping the tax rate so that we can keep as many people employed as possible while gradually scaling back and refocusing spending.
I agree; but as you mentioned, cutting spending cuts someone's job or paycheck somewhere. Cutting spending (and thus jobs) without the economy being able to absorb the newly unemployed and underemployed doesn't really solve anything; it actually could slow the recovery more than continued borrowing.The government needs to spend less.
No getting around it.
I'm playing devil's advocate, btw, since you had specifically pointed out the real-life consequences of cutting the federal budget (something everyone has left out of the conversation because it's not something we really like to think about). Personally, I feel that neither solution - continued borrowing nor cutting people loose before the economy can absorb them - is a good one. That's why I called it a Catch-22: We could solve the problem easily if we weren't stuck in the middle of it.