Increased deficit spending creates economic contraction in the long run via crowding out. It's simple, the government borrows from the same market as everyone else. When the government increases the demand for loanable funds, this shifts the demand for loanable funds to the right, thus increasing interest rates.
I am not all about tax cuts, however. And, this is where people tend to lose me. Taxes, at whatever level they are, should be consistent. Preferable everyone should be taxed the same, say 15% on all economic transactions.
I am not all about tax cuts, however. And, this is where people tend to lose me. Taxes, at whatever level they are, should be consistent. Preferable everyone should be taxed the same, say 15% on all economic transactions.