Quote:
Originally posted by Tom_PM
How can he have proposed a tax cut anyway when theres record debt?
I dont know about you folks, but when I got that 1 time measly $400 check, it was spent on bills immediately. I was like, ok, here you can have it back. What a waste.
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That's what it is hoped you'll do. Every dollar in America is circulated about 8 times a year. When you spend $400 it transfers hands 8x. You didn't give your $400 back to the government. You gave it to American businesses who spend the money elsewhere - such as investments and hiring more people. If everyone were to just put their money under their mattress then the whole concept of tax cuts as economic stimulus would be dead.
The largest tax cuts in US history were all followed by economic expansions. These occured under Reagan, Kennedy, and Harding-Coolidge. Now Bush's tax cut combined with record low interest rates has created the fastest annual expansion in 23 years.
When you can combine tax cuts with low interest rates you know you are going to have a strong, robust economy. Yes, combined with increases in spending the cost is a higher debt. The alternative was probably near recession conditions and unemployment continuing to rise. The United States pulled out of its recession much faster than say, most of the EU, has. EU nations such as Germany and France break their self-imposed 3% deficit rule in order to try to stimulate their economy.