Economy and that scary "R" word

[hooskins]

Originally Posted by Schneed10

1) If the tax cut wasn't put in place, unemployment would have hit sky high levels.

2) Government deficits don't stall economic growth. They weaken the dollar, which is a bad thing in that you can't go to Europe for vacation as cheaply, and you can't import goods as cheaply. But it's a good thing because people from other countries invest more in our companies (their currency is stronger against the dollar, so one Euro can buy more shares of Coca Cola than it normally could). Our businesses then take that cash and invest in new products and markets, creating jobs and generating more tax revenue for the US government.

Right but point two only lasts for a bit. Severe weakening leads to depreciation of the dollar, and in the LR can lead to inflation. Nations will pull out their investments for fear of failure. See Asian nations crisis and what happened to several Latin American countries from 70's-90's. The cycle goes back around.

Just studied this stuff last semester as an International Economics major.