Deregulation and tax cuts should be embraced to lead the world out of economic crisis.
Before moving onto our substantives, we first want to make it clear what this debate is about. Deregulation and tax cuts should be embraced to lead the world OUT OF economic crisis, the motion says. This debate is NOT about what the causes of the economic crisis were and how they should be solved. This debate is also NOT about on who the blame of the economic crisis lies and how to prevent a future one from happening. This debate is about finding the quickest and most effective method of recovery from an economic crisis under the assumption the economic crisis has ALREADY HAPPENED.
Before the debate begins, we should also take into consideration the myriad of causes that lead to each economic crisis and the equally numerous economic policies that can be enacted in response to each different crisis. Therefore a policy that is effective for solving one crisis may be useless in solving another. As such, despite the defining power given to the Proposition, the Proposition will not specifically place-set nor time-set the context under which the debate is going to happen so that a fair and meaningful debate that does not bicker over specific policies within narrow limitations can happen. Economic crisis we define as all general economic crisis and the commonalities they share—excluding factors unique to each different crisis. Embracement of deregulation and tax cuts we define as making deregulation and tax cuts—in short decreasing the government intervention in the market—the GENERAL DIRECTION of economic policies directed toward recovering from any economic crisis. At the same time, we note that this does not mean EVERY regulation will be relaxed and EVERY tax cut.
Having said that, the stance of the Proposition in this debate is that our eyes should not be tethered by past circumstances. We are well aware that corporate misgivings are often misconstrued as the causes of economic crisis. First we point out that, as aforementioned the causes differ for each crisis. However even for an economic crisis whose cause may have come from corporate misgivings, we believe once the crisis has happened, leaving it up to the market is the best way to get out of the crisis as will be explained in our following arguments. A baseball team loses a game due to the mistakes of its best pitcher and starts off with a bad season. Then which action should the team take next? Banish its best player for his mistakes and struggle through the next season with an incompetent pitcher? Or encourage and train that best pitcher so he can use his skills to win the following games and lead his team to a winning season? The best pitcher who has made the mistake is the market, the incompetent pitcher is the government, the lost game is the economic crisis. Let the market make up for the mistakes it has made.
You can also add to the debate by leaving a comment at the end of the page.
When solving societal problems, govt must seek the least pervasive, yet the most efficient way. Govt mustn’t feign a superman but ultimately let businesses find their way out.
1. Business acts quickly. Govt is an aggregate of extensive bureaucracy. The intricate chain of command requires red tape—unnecessary reviews, approvals, paperwork, and consequent time delay. Agility is a prerequisite for business. Govt may devise different economic policies and undergo trial-and-error, but business’s fate depends on ability to adapt. With fewer burdens to jurisdiction dogfights and hierarchy, business can make swift decisions.
2. Business can be more active. Govt is by nature reactionary, always anxious of public criticism. Business explores risks and takes decisive measures fatal in escaping a swampy crisis; govt, “better safe than sorry.”
3. Business is specialized. Govt with borad burdens is inefficient to deal with the torrents of economic crisis. Business utilizes accountants, analysts, and researchers with long experience and specialized expertise, maximizing benefits at minimum cost.
Some may blame businesses for the very cause of economic crisis, but a director must not knock the pitcher out of the box for a slip. That sign expresses outright mistrust to the pitcher himself, leaving an unforgettable mark of failure at the corner of his heart. Add to that, the sign is a submission to the crisis, rather than a firm resolution to overcome it; the resultant dejected atmosphere pervades both the team and the audience. A govt must entrust business with determination showing its determination to both citizens and international society.
Moreover, past failures do not deprive business of any aspects stated above. Placing responsibility is one thing, but rusting a resource, another. Govt does not have superpower to solve all problems at hand; shake off the savior complex and let businesses find their way.
A govt is a body set up for the good of the people of that state. Thus, it is fair to define the role of a govt as taking care of businesses and the state of the economy in its nation, because ultimately, these factors all affect the citizens. Having established what the govt’s job is, we can see what its role would be in a case of an economic crisis: help out businesses and corporations.
The main flaw of the prop is that it greatly overestimates the abilities and capabilities of corps. The so called “unnecessary” steps that govts take in order to make decisions are in fact crucial in rational decision making. The global recession we have been in for over 8 years is not going to be solved quickly, and the “agility” of corps is not what we need in order to get out of it. If the prop believes govts are “better safe than sorry,” which we don’t think is a vice, we can see that corps are “better sorry than safe.”
It is quite ironic how the prop has accused the govts of being “anxious of public criticism” while the very existence of corps depends on public perception. It is also ironic that the prop is making the claim that businesses are specialized, when the govt is designed to specialize in things to address issues. The US Department of Commerce has a branch (Bureau of Economic Analysis) that is specifically devotedto solving economic problems. On the other hand, corporate specialists focus purely on profit, and not necessarily in leading a nation out of a recession.
The “past failures” of corps are acknowledged in the prop argument. The govt should be there to guide corps to avoid the same “slip”, which affected so many lives. We don’t believe that the govt has superpowers, but completely trusting corps to get out of a situation they haven’t been able to for 8 years is irrational and completely idealistic. After all, the job of a govt is to help its state in times of need.
Ability To Recover
The stimulus package that we propose tackles not only job creation and consumer spending in the short term but also cultivates the economy’s recuperative powers. This prepares the economy in recovering itself with speed in future crises. History taught us that tax cuts and deregulation, as compared to direct gov spending and monetary policies, entail the least side-effects and encourage business activity in the optimal way.
Our scheme contains two parts:
1) Encouraging real investment. Our direction helps businesses—in differing degrees for each, depending on the industry—to improve their production. Such support for the supply side channels capital toward productive investment, which may manifest in new technologies, human capital upgrading. [[http://www.theatlanticcities.com/jobs-and-economy]] The result is “natural Keynesianism”; voluntary investment from the supply sector creates capital with which the economy can recover vigor. By extension, businesses increase its capacity to respond to economic pressures on its own. Past instances have shown that businesses under deregulation are more free to engage in contracts that maximize their productive capacity as well, resulting in more jobs and benefits for consumers. [[http://www.seek4media.com/money/]]
2) Stimulating production without risk of too much inflation. Any monetary stimulus carries this risk. Multiplier effect would enlarge the money supply out of control in the post-crisis period, which would hurt consumer confidence once again—this has often led to double dips in past crises, including the 1980-1982 US recession. [[http://www.nuwireinvestor.com/articles/inflation]] In the worst case, recession coupled with inflation can incur stagflation which leaves lasting damage on supply chains and keeps private investment low. Tax cuts and deregulation, on the other hand, are fiscal approaches that can encourage businesses with less concern of excess liquidity.
Prop states that the stimulus pkg(SP) will create jobs and increase consumer spending, this is the same outcome Opp desires; the problem is with the proposed solution. Furthermore, refer to how gov regulations have affected businesses positively in C3.
Primarily, prop failed to provide a direct link of SP to the resolution, explanations of how SP will create jobs or put more money into circulation is absent. Furthermore, past SP have been declared a failure. [[http://goo.gl/XC2j5]] Harvard's Martin Feldstein, head of the National Bureau of Economic Research stated people who get one-time windfalls usually use them to increase savings or pay off debt, neither of which results in the purchase of new goods and services. In this case, the SP cost $160 billion and did nothing for the economy. [[http://goo.gl/O0tC4]] Govts can stimulate an economy through granting consumers, workers and businesses sums of borrowed money. The main impact of SP is an increase in debt; raise future taxes and distort the normal functions of economic markets and personal and corporate decision making.
Second, as prop acknowledges, the benefits of SP will be “short term”. Studies by the Federal Reserve, the Congressional Budget Office and the Joint Committee on Taxation indicate that stimulus pkgs and tax cuts would increase the size of the economy slightly and temporarily but would reduce growth in the long term [[http://goo.gl/3uKK7]]
Opp is confused about the second part of the prop’s scheme. They say every SP has the risk of inflation which opp definitely wants to avoid, but we would like to focus more on the harms of deregulation and tax cuts, not SP.
Moreover, their sources overall provide invalid evidence to back up their arguments, their third one has expired, and their first source talks about mass transits. Prop wishes to see more direct engagement with their arguments as well as the resolution.
Stimulating businesses through tax-cuts and deregulation will be engine for economic recovery.
The second part of our proposed stimulus package involves stimulating business growth. Businesses will be one of the most positively affected by a policy in which increases deregulation and tax-cuts. By being exempt from a certain amount of tax and free from certain government regulations, businesses can gain an increase in investing power and flexibility in expansion and investment. Such policies are especially beneficial for large corporations, who are often the most bound by government mandated tax policies and regulations. Easing up on large businesses allows for more large scale capital investment. This means corporations can buy more raw materials, set up more factories, increase the amount of the jobs, and drop the prices of their products. In the scope of recovering from economic crisis where unemployment is high, prices rise, and inventory stocks pile up, the cheapest, fastest way to do so is through big businesses. The impact of average fixed costs and marginal costs on economies of scale are far lower than that of smaller ones, allowing them to make bigger and, on average, faster investments for a lower average total cost. This still accounts for larger investments, increasing money circulation throughout the economy and also (since part of such investments are also into labor costs) allowing for an increase in the number of jobs.
Though big businesses would serve as the central engine in fostering in economic growth, our proposed policy would still benefit small businesses and entrepreneurs as tax-cuts and deregulation also allows for more investment power and flexibility.
Though many may criticize the policy's tempory disregard of large corporations’ noblesse oblige, the burden of such large scale businesses to support society through its tax obligations, the government's priorities lie with getting the economy back to stabilized growth as effectively and efficiently as possible.
What prop misunderstood is that giving corps large amounts of money will not necessarily be effective in stimulating the economy. Even if they get more money, they usually take advantage of it because the larger these businesses are, the more inclined to corruption and unethical practices they become. The bigger corporations are, the harder it is to detect corruption. Corps, with the money they receive, abuse employees—who are politically and economically vulnerable in countries—to exploit them to get more profit, the cheapest and easiest way. Especially in a situation with less regulation and tax cuts are going to be actuated, more corps will seek chances to exploit their workers, manipulate their investments, and go against human rights, which will be further mentioned in contention 2. Also, the investment and financial resources, which would be in the hands of big corps, does not fall to the hands of workers or citizens. On top of this, when govts can no longer control both big and small corporations, the exploitation and abuse for workers will increase. Regulations and big govts usually keep an eye on the companies and make sure that they have standards on employment and practices. The IRTUMG reports that workers “have been complaining… about the deterioration in working conditions … particularly with regard to the payment of the minimum wage.” For years, companies were “in a flat refusal to comply with the laws of the country and the most fundamental workers’ rights, COBIGUA-CHIQUITA has insinuated that it will close down the plantations if its employees do not continue working, thereby totally violating their labor and trade union rights.”1 Just as this, less regulations and tax cuts basically give more power and authority to the corps so that they would manipulate the power. Even prop knows ‘the government's priorities lie with getting the economy back to stabilized growth as effectively and efficiently as possible.’
Tax cuts lead to market stimulation
Once an economic crisis happens, people’s consumption sentiment freezes up. Becoming scared, people refuse to spend, even in areas that are safe to spend. Their natural tendency becomes to suspect and fear which leads them to ignore even the legitimate improvements that are being made and stay sluggish in stimulating the economy. Such consumer psychology is the worst enemy of an economic crisis, more than the original reason that the crisis happened, more than the huge debt the economy faces. Because, once that psychology kicks in even the most laborious and effective methods made to improve the economy, and even the actual results coming from those efforts are ignored. And because those efforts are ignored, the economy sinks into an even deeper recession which again furthers the people’s fear and suspicion. Such was the case during the Great Depression. Such is the case in the present global crisis the world is facing. Therefore freezing of consumer psychology is the number one reason that a crisis is perpetuated.
Therefore it may be said that thawing the frozen purses of the public is the number one priority in recovering from any major recession. And this is why deregulation and especially tax cuts are needed. First of all such policies actually increase the amount of money that flows in to the market and into individual’s pockets. Encouraging people to spend, companies to produce and the market to move. Furthermore, once the market starts to finally move, people’s psychology starts to change and the amount of money that people spend increases disproportionately to the money actually released by tax cuts and deregulations. In economic terms this phenomenon is explained by the increase of the spending multiplier, which measures the amount of money people actually spend. Through such process the market is stimulated and the first step of a postive feedback cycle of recovery begins.
Proposition states that citizens are not spending enough money because of taxes, and the solution to that problem IS NOT deregulations and tax cuts because the former is an uncorroborated speculation. They state that tax cuts will make people spend more money, but without any substantiations. Taxes are not what hinder citizens from spending money, but it is the unease over unstable personal economy. Unemployment intermittently occurs in the state of economic downfall, and the consumer psychology isn’t one particularly auspicious. Thus, there’s only a limited expense in markets, which thus harms the economy by limiting the amount of money circulating in the economy. The government side needs to realize that the reason why people don’t spend money is the lack of money. So, giving sustainable job opportunities are the first step to solve this problem not tax cuts.
Tax cuts actually do not make people spend more money but it makes people invest them. Harvard's Martin Feldstein, head of the National Bureau of Economic Research stated that people who get one-time windfalls usually use them to increase savings or pay off debt, neither of which directly results in the purchase of new goods and services. In this case, the SP cost $160 billion and did nothing for the economy.
Moreover, in our third contention we have made it clear that regulations are needed for stable market, which is a quintessential prerequisite for stable patronage. Stable patronage, of course, comes before substantial monetary expenses. Whatever economic policy we adopt, our goal is to maintain the market as stable as possible, not leaving rooms for fluctuations.
Thus, not only does the Proposition fail to understand the causes of limited expense in markets, but also they do not understand the drawbacks of the tax cuts and deregulations. We the Opposition believe that for the sake of stable market, the regulations need be in place, if we really want to keep consumer expenses up.
Prop specifically stated “What we target are regulations that may help the economy during expansionary times but prove obstacles to efficiency during recession.” Prop’s burden was to prove obstacles to efficiency of these regulations during recession, and they have failed to bring these up in any part of the debate. On the other hand, opp explained why regulations are needed especially during recession to stimulate the economy by stabilizing employment &increasing consumer spending.
Prop evidently recognizes the negative impact of tax cut – lack of gov revenues – and their solution is relocation of other government expenses such as defense expenses. It is simply ridiculous that the gov has to cut down its security budget to reduce the gap created without taxes collected from corps. This is our point that tax cuts will cut down the benefits the gov is currently providing for its citizens, therefore increasing the burden on consumers. Prop conceded that welfare systems such as Medicaid will suffer from lack of financial stability, but have indefinitely argued that fundamental welfare systems will not be hurt. By stating Medicaid, a fundamental health care system for low income citizens, will be hurt, prop entirely conceded opp’s argument about government’s need for exsisting taxes.
In the beginning, prop used the word ‘stimulus package’ to refer to their case. We want to remind our opponents and judges that a stimulus package is a very specific term used to describe when the gov directly sends citizens money, usually in the form of tax rebates [[http://goo.gl/Keip1]] and do NOT refer to a plan that ‘stimulates the economy’. Prop has not clarified this in their debate, but has referred later on the debate “embrace tax cuts and deregulation” as their SP despite their burden to clarify their definition in the beginning of debate to prevent any misconceptions.
Plus, opp would like to ask prop to refrain from editing intros once debate starts.
Cutting taxes, no bailouts, and selective deregulation to keep market forces alive and promote efficiency.
Opp’s has completely misunderstood our policy. All their args are directed against the gov indiscriminately abolishing all existing regulations and showering bailout loans and funds on companies. That is not what we argue for. To repeat, our stimulus package contains two items: 1) granting tax cuts, and 2) selectively lifting regulations that hinder corporate efficiency.
Some regulations are meant to keep market forces alive and guarantee a reasonable level of consumer safety and environmental protection. It is illogical to argue for eliminating such regulations; those are kept in place. What we target are regulations that may help the economy during expansionary times but prove obstacles to efficiency during recession. Special licensing between companies engaged in a contract and other such certifications; market distortions like rates and prices that are set excessively low (either readjust higher or remove); & barriers of entry liks special licensing and bailouts to select firms are such. Thus Opp’s pts about working conditions and human rights violations do not hold. Deregulation will improve performance of firms. SP proved optimal with the US airline deregulation in mid 1990s. [[http://tinyurl.com/6k5o2거]] Regulated routes+competition were inefficient. With deregulation, the industry grew, creating more jobs and services, and ultimately fares became low, with consumers benefiting. What we ultimately seek is to make full use of the market forces. We do not argue for bailouts; it hurts competition. That cutting taxes and giving bailouts is unfeasible is an undue criticism. Our arg is a bottom-up approach that utilize the nature of firms to strive for profit maximization. This will not only stabilize the economy, but stimulate the supply sector to allow overall expansion—a sound exit strategy. Opp’s said companies will try to “get more profit, the cheapest and easiest way. Yes, that is exactly why we’re entrusting recovery to firms.
We directly quote the Prop in its intro,” the Prop will not specifically place-set nor time-set the context under which the debate is going to happen so that a fair and meaningful debate that does not bicker over specific policies.” There was no policy nor model listed under the Prop, and we can conclude that Prop’s accusation that we have “misunderstood” its policy is the result of a communication error, which Prop is to blame for.
Prop has conceded that some regulations are necessary. It has followed this claim with listing regulations which it thinks do not increase consumer spending, such as “bailouts to selected firms.” However, bailouts are essential to consumer spending, in that they maintain jobs for the employees of the targetted corps., and increase money going into the pop. The nature of Govt Bailouts will be explored after we directly engage with the single example presented by prop to showcase the ‘effectiveness’ of deregulation.
The example Prop has brought up about how deregulation has helped out the US airlines in the mid 1990 is flawed in that 1)the US airlines weren’t in an economic recession when the deregulation took place. It made no link to suggest any positive effect could be duplicated during this global crisis 2)the basic premise it hoped to prove with the example was not actualized. Deregulation has actually decreased the efficiency of the airlines. In fact, “The airlines recorded a net operating loss of $421 M as early as 1981, when the number of passengers fell to 286 million.” [[http://goo.gl/2tYmn]]
Bailouts and regulations do far more for jobs; not deregulation. We can see this in the GM and Ford bailouts, which were incredibly successful (refer to Opp C3, which was unrefuted.) Further, competition, something Prop values greatly, cannot exist if all corp.s and businesses do not function. Regulated bailouts actually help maintain the diversity of players in businesses, allowing for competition-delivered consumer
South Korea Summary
Problem, Premise, Principle: 3 reasons why Prop won.
The PROBLEM of this debate was that Opp did not know its stance. Opp accuses Prop of policies like loans that were never stated. Also we never changed the intro once the debate has started. So in turn we ask Opp to stop making false accusations and misrepresentations. Add to that Opp has serious contradictions. Loan and bailout, windfall and bailout, regulation & policy, principle and bailout: CHOOSE YOUR STANCE. Finally the reason we didn’t specifically “set” was so that Opp could refute our policies without challenging the definition itself and two sides having different debates. Opp takes advantage of this gesture to avoid directly rebutting Prop’s arg when the model was clearly specified through our points.
The PREMISE of this debate was that the economic crisis had already happened; meaning a significant degree of URGENCY is at hand. While we recognize some Opp’s values, we can’t have everything at the same time and need to prioritize. In a recession RECOVERY comes before REFORM. In fact, reform can only occur after recovery b/c 1provision of higher education and salary can only happen when there is money to spend. W/o a healthy economy at hand, Opp is idealistic and 2ppl have a hierarchy of needs: basic needs come before ideals like self-realization. Therefore ppl will only start looking for reforms once they have enough money in their purse to not worry about everyday living. Finally urgency of the situation minimizes Opp’s concern that corps will resort to corruption. Before corruption can occur there must be enough money to filch. When your business is toppling, the first thing on your mind is to save the business, not plot out some dark scheme.
The PRINCIPLE of this debate was only understood by us. Instead of recognizing widely accepted econ principles, Opp twist them into assumptions, saying we didn’t cite textbooks for ESTABLISHED FACTS. Tax cuts stimulating the market through increasing spending multiplier and liquidity is an established theory. Opp twists by saying tax cuts are used for investments and paying off debts. Are these not injection of money into the market? Of course increased spending doesn’t just mean “buying products”. Quote by Feldstein is invalid because tax cuts are not one time windfalls (bail-outs are) and even if it was, increased investment still helps the market. Opp’s response to airline case—industry wasn’t in recession and deficits were occurring in 1981—are also invalid b/c although the economy was not in recession the industry was clearly suffering from losses and deregulation happened in mid 1990s: deficit before only supports our case.
After all, Opp fail to show not only why IN PRINCIPLE govt does better than business but also why imposing more regulations is better than less+tax cut—it’s ultimately doubtful whether that’s even its stance, since Opp couldn’t explain any LEGITIMATE regulations as examples.
Tax Cuts Harm Social Programs for Citizens
Social programs play a big part in the economy. We believe that it’s better for consumer spending if people don’t have to pay tons of money for their private schools or healthcare. They don’t just create better social systems but also provide a lot of benefits in regard to long-term economic growth through a greater quantity of educated citizens. Education will provide more jobs because it opens door and grants more opportunities to individuals. When people are employed, it boosts the economy. An educated population is more likely to bring forth entrepreneurs to create new businesses. Also it encourages general innovators to address world and national issues such as the economy, and then we would be able to see money being circulated in the economy, since people will have stable employment. We need to realize the fact that tax cuts will ruin these benefits by restricting the government’s ability to provide these social programs, which are the key to bringing our economy back on track. Taxes can be a bit of an additional burden, but it helps the economy and the society significantly. An educated population is less restricted in class-movement because of the added opportunities, while it creates a stronger middle-class, which is vital to a diverse economy. For example, in India, the schooling provision favors those better off, and disadvantaged groups have less access to poorer quality education [http://goo.gl/ITPKs]] Not only this, but in Bangladesh, Marginalized and disadvantaged groups in general—particularly the rural and urban poor—have had significantly less access to education. [[http://goo.gl/d4GSp]] Therefore, with tax-cuts, we cannot expect the govt to provide any social programs, nor have any improvements on our economy.
We have 3 levels of response
1.Opp does not understand the urgency of the situation at hand. Education and healthcare provide important, but as Opp conceded, “long-term” benefits. When businesses are toppling and households are going bankrupt, economic growth becomes priority and RECOVERY should come before REFORM. In fact, reform can only happen on top of recovery. If the entire economy is suffering where is the money to spend on public welfare programs? Providing a solid economic foundation through which more tax could be garnered will ultimately lead to better programs. Also we must consider why people, esp. poor households, take their children out of school to work in difficult times? It is only after basic materialistic needs are met, that people start looking for higher ideals and long-term goals.
2.Tax cuts do not directly lead to significant cuts in social infrastructure such as education. First, the reason these services are reduced during recessions is because the economy as a whole doesn’t have as much money. Second, while tax cuts sometimes lead to reduction of welfare programs such as Medicaid, it seldom touches something as fundamental as education. Finally, decrease in tax revenues could be made up by relocating gov. spending in other areas, e.g. defense spendings.
3.Opp misunderstands Prop’s case regarding tax. Despite their rebuttal to our arg4, we never said the reason people don’t spend is due to taxes. The entire first paragraph notes that the reason people don’t spend is due to the lack of money in the market—a point Opp agrees. So how do we remedy that? By directly injecting money into individual’s hands through tax cuts! Also creation of more jobs was our arg2. Finally Prop does not understand why investments are bad as it stimulates the economy. In fact, Opp’s claim is in line with past research that proves tax hikes have negative impact on GDP whereas tax cuts have positive impact[[http://tinyurl.com/ah732t]]
Deregulation Fuels Corporations to Behave Unethically, Devastating Human Rights and the Environment
Deregulation has fueled self-interested corps to earn as much money as possible, with zero ethical restraints. This is evident in case studies done about major corps, such as Coca Cola and the major human rights violations they have performed. Coca Cola has intentionally moved factories to nations where workers are not allowed to unionize in order to decrease their overhead costs. Examining how corps treat undocumented workers (like illegal immigrants in the US) can effectively represent how they act without regulations. Over 40% of Latino menial labor workers have been subjected to harsh abuse without the opportunity for govt intervention. The US is currently experiencing a protest on Wall Street where a group of activists stand against corporate influence, gross social inequality on the financial district. [[http://goo.gl/QIn8H]] In a society where human rights are valued, regulation is mandatory.
Further consequences of deregulation include environmental degradation. Towns in India such as Mehdiganj experienced significant amounts of water shortages due to Coca-Cola’s out-of-control bottling plants. The High Power Committee established by the state government of Kerala in India has held Coca-Cola liable for $48 million US for damages caused as a result of the company’s bottling operations in Plachimada.” [[http://goo.gl/GvZN2]] In addition to India, the whole world experiences shortage of water with a ratio of one every five people not getting access to portable water and deregulated corporations such as Coca-Cola spending 218 billion liters of water per year does nothing to help this state. [[http://goo.gl/GD33P]] At this rate, deregulated corps will get out of hand. Strict regulatory agencies such as the FDA are fully needed to monitor corps and to follow rules to keep the corruption levels at the lowest. Ultimately, economic theories thrown by both the proposition and opposition have to work within the constraints of basic human rights recognition.
The opposition seems to have misunderstood both the concept of deregulation and way in which we hope to implement such into our recovery plan. First of all, deregulation does not mean in any way, “giving corps large amounts of money”. If anything, such government action would fall under intervention, not deregulation. Deregulation involves reducing or eliminating government control of the operation of market forces. Bail-outs, government loans are not forms of deregulation.
Moreover, the opposition has wrongly accused our plan as one with “zero ethical constraints”. However, as specifically stated, our stimulus package involves letting businesses to be “exempt from a CERTAIN amount of tax and free from CERTAIN government regulations”. This does not mean our policies are to rid of all taxes and regulations intended to bind businesses for social purposes. This means to make changes (some cases in which may be temporary) in policy regarding business either by broadening the definition or interpretation, eliminating minor market barriers, easing requirements or surveillance, or temporarily suspending certain regulations or tax requirements. This by no means is to be interpreted as the complete ‘laissez-faire’-ification of the economy as the opposition seems to understand.
The opposition has continuously referred to cases such as deregulation in regard to labor laws and human rights. The proposition’s conception of deregulation neither means to do as suggested nor necessarily regards such extreme assumptions. For example, deregulation can mean policy reformation in regard to cross-border rule harmonization. Often different countries and states have their own domestic requirements of certification or qualification meant as a pro-domestic/local barrier of entry. Simplifying or unifying such international/interstate regulations effectively opens markets for entry, fostering growth and competition. Other methods include reducing tariffs and other govt fees
Regulation is Necessary for the Stabilization of Markets and Employment
Also pertinent to the state of economy is the stability of markets. Countries today are suffering from financial crisis because the markets are simply unstable. Stability of markets maintains stable product value, which then keeps consumer trust on top. With stable markets that come with regulations, high consumer trust will be a guarantee. The consumers will contribute to the national/global markets. Money circulating throughout the markets is the start of stimulating the economy and breaking free from the crisis. This is also similar to how the stable foreign investments keep the national market at stake. To clarify, having stable markets is beneficial for both national/global markets and foreign investments.
The Prop has suggested that we give out loans to the corporations to be able to bring themselves out of the recession. This is not feasible with their plan because 1) Tax cuts decrease govt revenue substantially, and makes it hard for govt to hand out large sums of money. 2) Corporations without regulations will spend the govt money on things like more Christmas bonuses for exec employees. What the opp is suggesting is that we do not deregulate or have tax cuts, but rather give more job opportunities by saving the companies with the REGULATED tax revenues. GM lost 19.6% of their market share and Ford had their biggest los:; $12.7 billion, over last few years. These two companies are two big job providers of US. The govt gave them money to keep their businesses going, regulating on what they are spending the money on. Having regulations and tax revenues mean saving a lot of jobs, the companies, and money, while forbidding the companies from using the revenue money on other things. [[http://goo.gl/5e9YY]] [[http://goo.gl/40qPC]].
Government Intervention is Necessary for the Protection of Workers and Citizens
Opp sees providing stable employment will significantly benefit the economy which can be achieved by govt’s regulation in businesses. Especially with the current economic crisis, people have constant fear of being unemployed. This fear of unemployment results in hesitance in their consumer spending thus harms the economy by limiting the amount of money being circulated. With gov’t regulations such as min wage policy and bailouts on corps, opp sees that this will bring down the instability of employment and abuse of labor rights in status quo and also result in wage consistency for the employees. Once employment and wage are regulated thus stabilized, we can easily presume that more money will be spent by consumers, and fuel the economy that is currently predominantly driven by consumer spending, which accounts for approximately 70 percent of economic growth in US for instance. [[http://goo.gl/JmYOE]]
Govt regulations play a crucial role to protect workers and consumers. It is due to govt interventions that laws prohibiting discrimination upon age, sex, race; right to unionize; enforcement of workplace safety exist. Every product sold in the US, for example, is affected by some kind of government regulation: food manufacturers must tell exactly what is in the product; automobiles must be built according to safety standards and pollution standards; prices for goods must be clearly marked; and advertisers cannot mislead consumers. [[http://goo.gl/BzV2B]] Govts need to consider the impact of corp’s actions upon society and monitor and control activities that are against the public interest. Thru intervention of the govt, like investment in infrastructure project, capital intensive projects and innovative projects, opp hopes to generate employment, increase spending and helped economy to bail out of recession. In all, opp can easily conclude that government intervention is necessary for economical stability and regulation of monopolies.
Fundamental cause of high unemployment is lack of demand. We must focus on incentives for businesses, not sugarcoated comfort on public that only exacerbates public rage and despair. This is exactly why we prioritize providing pro-business environment.
Even that aside, Opp has serious antilogies. It claimed that loan to businesses is detrimental. Not to mention that loan was never our point, opp now sees bailout as a stabilizer of employment. Opp also argued “windfall” is useless; isn’t bailout THE windfall?
Opp TOTALLY misunderstands deregulation. We don’t aim to repeal basic regulations for welfare, and minimum wage is definitely one of them. Now one is not mutually exclusive, and one is contradictory—what’s left in Opp’s reasoning? How does Opp arrogantly assume our model HARMs workers when we outline development and more money to individuals while opp only promises stabilization at best; when that promise is flawed?
Opp lists ESSENTIAL regulations for consumers—IRRELAVANT. We don’t aim to abolish those on discrimination, corruption, and transparency. We don’t want anything imposed ON TOP of those—licensing, barriers of entry, price setting, etc. that can come AFTER recovery. For example, GOP opposes to new 219 regulations on small businesses, just seven of which cost more than $100 billion and thus hamper job growth.[[http://tinyurl.com/6zow9zs]] It is preposterous to accuse us of disarming guardians of public interest.
And it’s offensive to feign a moral ground with public interest, when individuals’ private interest is driving force of capitalism that we aim to foster. Opp goes on praising govt with “innovative projects” but let’s remember point1: corps. are better decision-makers. What did we learn from the Great Depression, which wasn’t solved by New Deal but by the wartime economy that nourished industries? At the simplest level, corporations hire experts with large salary—how can they NOT be more adept than govt work
Governments and Corporations should focus their economies towards individuals.
Opposition believes that job creation is essential in developing a country’s economy. When more people are employed, the economy is more likely to boost the economy. Through government support, more of the population will be able to be entrepreneurs to create new businesses. Job creation is the redeeming quality of companies. The role of companies in the economy is to decrease the rate of unemployment and to see money being circulated in the economy, since people will have stable employment. Govts in general are obligated to regulate the economy as it is focused toward the people and to be free of any corruption or unethical practices. The role of taxes as well as government is to generate sufficient revenue to finance public sector activities toward the citizens, and employees. A government should prioritize its concerns about corps to better their citizens. Taxes also fulfill the need and desire for increased public services, and the capacity to levy taxes effectively. “No one likes taxes. People do not like to pay them. Govts do not like to impose them…While necessary, taxes impose real costs on society. Good tax policy seeks to minimize those costs.” Especially in situation with less regulation and tax cuts are going to be actuated, more corps seek chances to exploit their workers, manipulate their investments, and go against human rights. The investment and financial resources, which would be in the hands of big corps, does not fall to the hands of workers or citizens. Regulations and taxations are a means for governments to scrutinize companies and make sure that they have standards on employment and practices. Govts are not only involved in economics but also mandated to reflect many other social factors too including concerns about fairness and feasibility in dealing with their people. While individual corps is interested soley on profits, govt should examine the big picture and try to impact the economy holistically.
The Opp continues to assert their groundless assumptions. “More corps seek chances to exploit their workers, manipulate their investments, and go against human rights.” It talks of regulation and taxation in general, without distinguishing between the types of each. They merely claim that regulation in general is good n noawhere do they prove how or how having more regulations diring crisis will help.
We have argued time and again that we will only temporarily lift regulations that places hindrance on market forces, those that lead to market distortions like: extraneous certification rules, rates/routes/price setting, and certain barriers to entry. Under our policy, gov IS present to keep a close eye on promotion of social interests as a whole, as fundamental regulations on worker rights, environmental protection will be kept; businesses are NOT allowed to roam freely and trample on human rights. The example of airline industry was meant to show that deregulation and tax cuts did bring about a significant positive change in the performance of the supply sector; that its context was not a depression matters little. We have shown that in many cases selective deregulation has stimulated market forces. Another example is how state economic growth accelerated following state-level deregulation on branching. This removal of limits on bank entry and expansion allowed “state economies to grow faster & led to higher rates of new business formation after the deregulation. At the same time, macroeconomic stability improved.” The banking system formed connections across the nation, which “made local economies less sensitive to the fortunes of their local banks.”[[http://fic.wharton.upenn.edu/fic/papers/02/0239.pdf]] Hence better efficiency and capacity to deal with economic maladies.
An Examination of Today's World Proves Government Regulation is Essential.
Unfortunately, corporations right now, whether they are small or big, aren’t as well-off or controlled as prop thinks. Giant corps are finding more and more ways to take advantage of deregulations to walk further into the path of corruption. For instance, Samsung’s chairman Lee Kun-hee and his loyal aides were accused of having stolen as much as 10 trillion won, or $9 billion, from Samsung subsidiaries and stashed it in stocks and bank accounts illegally opened in the names of executives. (http://goo.gl/P94vI)
Another example is Walmart. Walmart experienced massive union creations in 2004 at Quebec because countless workers were “dissatisfied with their pay and working conditions.” Eventually, the store shutdown on Feb.9, devastating 190 workers; drawing out tears. Jean Tremblay, the mayor of Saguenay, gave interviews expressing his anger. " ‘Because you are big and rich and strong, you can close a store to make your workers in other stores afraid? No!’ Tremblay said. He discussed Walmart’s corrupt state and its need to change policies.[http://goo.gl/P7cwk].
The solution is pretty straightforward: make governments regulate corporations.
Germany for example, understands this fairly obvious solution and voted in favor of supporting a more powerful fund to bail-out troubled Eurozone economies. [http://goo.gl/B3rYP] As Europe’s largest economy, Germany’s commitment to the fund would rise from 123bn euros to 211bn. In contrary to its neighbours, Germany’s GDP rose by 3.6% in 2010. [http://goo.gl/H3iEL] Not only are regulations such as bailouts effective in boosting the economies of a country, the regulations can prevent corps from going money-blind and corrupt. Conclusively, the world the opposition examines obviously requires full intervention by the governments to ensure the legality and effectiveness of corporations.
We hope Opp’s observation of regulations, our claims, and government is at least as accurate as that of corporations.
1. The only regulations Opposition know are loans and bailouts. Nobody needs a colossal Oxford Dictionary to realize those aren’t regulations. Regulations are restrictions on businesses made to protect the public good-monopolies, corruption, quality fraud, etc. Loans and bailouts are POLICIES that help corporations in crises—they are in nature IRRELAVANT to debate, if not favoring us, since it principally puts businesses in charge and govt, assistance. It was put in the scope of this debate since Opp advocated, but we showed Opp can’t advocate that without avoiding contradictions. Now, why do we waste time in trivia?
2. Above all, Opp was seemingly concerned about business corruption, yet it never showed how govt regulations can stop it. Opp failed to provide any regulations pertinent to the matter and logical steps showing efficacy of those regulations. Opp’s point here is thus invalid; and halfheartedness suggests after all Opp doesn’t oppose our principle, businesses not govt.
Even if Opp WERE concerned, we emphasized that regulations on corruption must be kept; this is not a point of dispute. Opp must stop cheap extreme attacks and rather present fundamental reasoning behind the superior management of govt it premises.
3. Speaking about principles, opp does not prove how govt is immune from corruption—another reason this argument is invalid. Govt does not comprise thousands of Mother Theresa; just like corporations, it’s a collective body of human beings with greed. Besides, aren’t govt officials, who are paid less, who have control over and more knowledge on loan delivery process, who have sated understanding (and latent anger) of abysmal blackhole of bureaucracy, susceptible to corruption? Opp may rhapsodize about public scrutiny; but sure, public scrutiny did its job for Abu Ghraib, not an informant with conscience.
There are three major clashes areas in this debate:
1. The cause of a lack of consumer spending and the ways to fix this
2. Effectiveness of govs and corps in stimulating the economy
3. Short and long term effects each actor will have on society
1. Consumers refrain from spending due to a lack of money from unstable employment andwages, and inflation. Prop said that its ‘stimulus package’ will increase corp’s investment, growth, and provide employment. However, it failed to provide any direct link as to why tax cuts will necessarily encourage profit-driven corps to create more employment. Also, prop agrees every SP has the risk of inflation which is problematic as inflations fuel recessions. Opp, however, proved how regulation is necessary for stable income &employment, to circulate more money into the economy. In both prop and opp’s worlds, tax cuts are going to result in lack of gov revenues. Prop wishes to solve this problem by relocating gov expenses, such as from defense and medicaid. This is incredibly absurd in that prop has already conceded that things like social programs, designed to help the citizens, are essential to a nation, while its plan is directly taking money out of them.
2. Reasons why prop believes corps are more effective economy stimulators are a)they make swift decisions, b)they dont worry about public perception and c)they have expertise. Opp sees that governments think through their actions and weigh the pros and cons to prevent making irrational decisions. Further, ‘swiftness’ is not an attribute to get us out of a recession that we haven’t been able to get out of for over 8 years. Further, the existence of corps depends on public perception. Lastly, expertise is not unique to corporations; govs in fact have more expertise since they are designed to deal with a nation in crisis.
3. Prop believes that due to urgency of recession, we need immediate short term solutions. Opp sees this as putting a bandage on a wound without healing it and that there cannot be any ‘recovery’ if there are not any real reforms. We have been in the recession for years now, and clearly, short term focuses that result in immediate money, but end in bigger problems, are not what we should strive towards. Tax cuts and deregulation, which may provide a little more money for the citizens, are a)not enough to greatly boost spending, and b)come with great costs, like human rights violations.
What the Opp has shown in this debate is that there is not only economy that will be affected by tax cuts and deregulation, but also other factors, such as the environment and human rights. Ultimately, the reason we are trying to save the economy is to help the people, and Opp has proven that employment/economy, the environment in which people live in, and social programs for the people will be hurt through the motion.
What do you think?