High Speed Rail Affirmative
Stimulus K2 Economy-Solves Competetiveness
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- Stimulus K2 Economy-Sustains Capitalism
- The economy is ailing due to the lack of stimulus and deregulation of the economy during the Bush years.
- Stimulus K2 Economy-State Economies
Stimulus K2 Economy-Solves Competetivenessinvestments like the high-speed rail are the reason for competing nations’ success; if the US were to follow suit, then the Chinese threats to U.S. primacy would be gone.Stiglitz ’10 (Joseph, New Perspectives Quarterly, “Time for a Second Stimulus”, pg. 63, http://onlinelibrary.wiley.com/doi/10.1111/j.1540-5842.2010.01164.x/pdf, Stiglitz is an economist and a professor at Columbia University. He was awarded the Nobel Prize for economics in 2001. He was chief economist of the World Bank and chairman of President Clinton's Council of Economic Advisers.) ON CHINA - One of the reasons the Chinese are recovering so well is that they have read all the good American textbooks on macroeconomic management that we’ve recently ignored. The Keynesian idea, which they’ve adopted, is that if you have a weak economy, the government should spend. And they are doing it the right way by stimulating the economy in the short run through investments that provide the basis for long-term economic growth. For example, their stimulus includes spending on a high-speed rail system. Just as the transcontinental railroad changed America’s economic geography when it was built, it will do the same for them. Now they have the fastest trains in the world. When completed, that will leave them in a position for faster growth. Stimulus K2 Economy-Sustains CapitalismThe world economy faces devastation without intervention from the government.Stiglitz ’08 (Joseph, Time Magazine, “How to Get Out of the Financial Crisis”, pg. 1, http://flash.lakeheadu.ca/~kyu/E5118/Crisis1.pdf, Stiglitz is an economist and a professor at Columbia University. He was awarded the Nobel Prize for economics in 2001. He was chief economist of the World Bank and chairman of President Clinton's Council of Economic Advisers.) The amount of bad news over the past weeks has been bewildering for many people in the world. Stock markets have plunged, banks have stopped lending to one another, and central bankers and treasury secretaries appear daily on television looking worried. Many economists have warned that we are facing the worst economic crisis the world has seen since 1929. The only good news is that oil prices have finally started to come down. While these times are scary and strange for many Americans, a number of people in other countries feel a sense of deja vu. Asia went through a similar crisis in the late 1990s, and various other countries (including Argentina, Turkey, Mexico, Norway, Sweden, Indonesia and South Korea) have suffered through banking crises, stock-market collapses and credit crunches. Capitalism may be the best economic system that man has come up with, but no one ever said it would create stability. In fact, over the past 30 years, market economies have faced more than 100 crises. That is why I and many other economists believe that government regulation and oversight are an essential part of a functioning market economy. Without them, there will continue to be frequent severe economic crises in different parts of the world. The market on its own is not enough. Government must play a role. It's good news that Treasury Secretary Henry Paulson seems to finally be coming around to the idea that the U.S. government needs to help recapitalize our banks and should receive stakes in the banks that it bails out. But more must be done to prevent the crisis from spreading around the world. Here's what it will take. The economy is ailing due to the lack of stimulus and deregulation of the economy during the Bush years.Stiglitz ’08 (Joseph, Time Magazine, “How to Get Out of the Financial Crisis”, pg. 1, http://flash.lakeheadu.ca/~kyu/E5118/Crisis1.pdf, Stiglitz is an economist and a professor at Columbia University. He was awarded the Nobel Prize for economics in 2001. He was chief economist of the World Bank and chairman of President Clinton's Council of Economic Advisers.) How We Got Here The troubles we now face were caused largely by the combination of deregulation and low interest rates. After the collapse of the tech bubble, the economy needed a stimulus. But the Bush tax cuts didn't provide much stimulus to the economy. This put the burden of keeping the economy going on the Fed, and it responded by flooding the economy with liquidity. Under normal circumstances, it's fine to have money sloshing around in the system, since that helps the economy grow. But the economy had already overinvested, and so the extra money wasn't put to productive use. Low interest rates and easy access to funds encouraged reckless lending, the infamous interest-only, no-down-payment, no-documentation (“liar") subprime mortgages. It was clear that if the bubble got deflated even a little, many mortgages would end up under water - with the price less than the value of the mortgage. That has happened - 12 million so far, and more every hour. Not only are the poor losing their homes, but they are also losing their life savings. Stimulus K2 Economy-State EconomiesStates are incapable of providing for their own stimulus. In fact, the USFG needs to use stimulus to help their problems.Stiglitz ’09 (Joseph, Eastern Economic Journal, “The Current Economic Crisis and Lessons for Economic Theory”, http://www.palgrave-journals.com/eej/journal/v35/n3/full/eej200924a.html, Stiglitz is an economist and a professor at Columbia University. He was awarded the Nobel Prize for economics in 2001. He was chief economist of the World Bank and chairman of President Clinton's Council of Economic Advisers.) In assessing the appropriate size of the stimulus, we need to take into account the negative stimulus coming from the automatic destablizers built into state expenditures. Most states have balanced budget frameworks. This means that when tax revenues fall — as they do when the economy goes into a recession and when real estate prices plummet — they either have to cut back on expenditures or raise taxes. California alone has faced a shortfall of $40 billion. A little while ago, the shortfall of the States was estimated to be around $150 billion per year; but as the crisis has deepened, that number has increased. Thus, almost half of the stimulus simply offsets the negative stimulus coming from the states. We should have enacted a simple revenue sharing arrangement, making up for states’ revenue shortfalls. 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