How does republican strategy of slashing government spending help economy?
January 8th, 2012 | 
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Question by black dog: How does republican strategy of slashing government spending help economy?
In my opinion it worsens the economy. 70% of economy is controlled by consumer spending. The more the consumer spends, the more the jobs are created because every dollar that is spent is someone’s income. And that someone can then create more jobs because he/she is getting steady flow of funds. The only reason bailout failed is because the bailout was issued to corrupt and companies who have crooks that are in financial management. In short the bailout was never issued to the consumer and that’s why it failed. Had the bailout been issued to the general public, it would have resulted in better condition of economy. Government programs spending affects the consumer and cutting government programs hurts the consumer who will also be forced to make cuts. And then economy may worsen.
an example of how reduction in government spending hurts the consumer spending. Government does not fix potholes on interstate highways. Several potholes develop and that damages the tires and alignment of vehicles. This will hurt the already financially squeezed consumer, because he will have to get alignment fixed which costs $ 70 and then get new tires which cost $ 600 altogether.
i already see pothole growth increasing exponentially and government doesn’t care to fix it
Best answer:
Answer by NDMA
Monetizing the debt to pay for spending debases the dollar and as result that alignment now casts $ 210.00 and with new tires the consumer is paying more than $ 2000 altogether. Unfortunately because bread is now $ 10.00 a loaf and the consumer puts feeding his family above fixing the car the consumer instead of commuting 30 minuters to and from work in his car now has to take public transportation and spends 2 hours commuting therefore having less free time, less time with the family and an even further lower quality of life.
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It strengthens the dollar so consumer spending goes further. When necessities are priced higher, then the consumer has less money to spend on durable goods which grow the economy.
Slashing govt spending does not mean slashing essentials.
As it is, the roadways of America are filled with potholes, and most roadways are state responsibilities.
If the fed govt slashed spending, the states would have more money for essential repairs.
Slashing spending and shrinking the fed govt will lead to more money in the hands of the state
and local govts. They are more responsive to the taxpayers.
It works like this. The Government cuts S.S. road work and other programs forcing older people to work longer. We are at the point that for every 5 people who retire 4 new jobs are created. By cutting Government programs fewer people can get jobs. Running out of benefits, and no longer being counted as unemployed. As fewer new jobs open up fewer Graduates get jobs, Those that don’t, have never worked, So are not counted as employable. After some time this reduction in the work force,and benefits show up as a reduction statistically as fewer people out of work. Causing unemployment rates to drop. And bringing prosperity to all. Because corporations can now not raise wages to keep up with inflation. As if there workers object they can hire statistically non existent workers. And invest the profits overseas. You need to use the new modern pole-cat-ical book of modern math to figure these equations on the easy to use sliding scale. To understand how this works to give us a bright future.