Originally Posted by gibbous
John Boehner disagrees with you. Regarding the Cut, Cap, & Balance bill the house just passed- "It provides President Obama with the debt limit increase he's requested while making real spending cuts now and restraining future government spending and debt that are hurting job growth."
I've heard it argued that government debt is directly hurting the private job market, but nobody who has made the argument has ever bothered to explain why or how. Can anyone connect the dots on how all these born again budget hawks are supporting that claim?
I'm going to draw this conclusion purely from what you've just said, so if my answer is way out of context that's why (could also be because i'm way of track anyway though
This is one example of a classical economists response to recovering from a recession. By cutting government spending, they assume that the money the government would originally have borrowed will be loaned to the private sector, instead of to the government, where there will be a greater profit made from the same money based on the assumption that the private sector is more efficient than the public sector. It's a similiar tactic to what George Osborne plans to implement in the UK's economy.