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Raising taxes increases revenue, and cutting spending while the economy is still depressed reduces employment.
Analysts offered several theories for the rebound in spending while the unemployment rate remained stubbornly high.
The national number is based on spending, while the state numbers are based on profits and income of workers.
However, there is a risk that higher interest rates will dampen consumer spending while the cooling global economy hits exports".
That leaves France in a tight spot, since it's difficult to cut spending while the economy is still floundering.
In a more balanced euro zone, the Germans would raise consumer spending while the French would reduce their deficit.
Indeed, slashing spending while the economy is depressed won't even help the budget situation much, and might well make it worse.
But those moves would require substantial new spending while the state has barely enough cash to pay its bills each month.
First, governments should be spending while the private sector won't, so that debtors can pay down their debts without perpetuating a global slump.
But now, despite all the Tea Party-inspired talk against stimulus, the US has largely maintained public spending, while the Europeans imposed bludgeoning austerity too soon.
Similar(1)
Otherwise, the two issues do not have any business being part of the same debate, since one addresses how we should proceed in the future (debt/spending), while the other asks if we will honor the promise to pay for money already spent in the past.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com