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Unformatted text preview: Mountain Brook Debate 1 2009-2010 Reverse Spending DA Reverse Spending DA Index Mountain Brook Debate 2 2009-2010 Reverse Spending DA 1NC The economy is recovering now but it is on the brink- the fed is cautious of a quick double dip Aversa 7/14 (Jeannine Aversa. “Fed eyes steps to bolster sputtering recovery.” AP News. 7/14/10 http://www.google.com/hostednews/ap/article/ALeqM5g1oxREFfFMcuUcB9TWYRzro- AMywD9GV13LO3 ) Federal Reserve officials cut their forecasts for growth this year and signaled they stood ready to take new steps to keep the recovery alive if the economy takes a turn for the worst. A new document, released Wednesday, revealed a more cautious mood among the Fed policymakers in light of Europe's debt crisis, a volatile Wall Street, a stalled housing market and high unemployment. With risks growing, Fed officials at their June 22-23 meeting saw the need to explore new options for bolstering the economy. That's a turnaround from earlier this year when they were moving to wind down crisis-era supports. No new specific steps were disclosed or agreed upon at that time. However, if the recovery were to deteriorate, Fed policymakers have options. They could revive programs to buy mortgage securities or government debt. They could lower the rates banks pay for emergency Fed loans. The Fed also could create a new program to spark more lending to businesses and consumers in a bid to lure them to ratchet up spending and grow the economy. The economic and political hurdles for taking such action would be high, economists said. "If the economy takes a nasty spill, then yes, it would take new policy action. But if we continue to see kind of mediocre, ho-hum growth, then that won't be enough for them to move," said Michael Feroli, an economist at JPMorgan Chase. In the end, Fed Chairman Ben Bernanke and his colleagues agreed to hold a key interest rate at a record low near zero to help energize the economy. And they repeated a pledge to keep rates there for an "extended period." At that time, Fed policymakers said they didn't think the slowing in the economy seen thus far warranted new stimulative actions besides those already in place, according to the minutes of the June meeting. 2. Defense Spending On Troops is key to decrease the effects of the recession Martin Feldstein, 2008 . (professor at Harvard). “Defense Spending Would Be Great Stimulus.” December 24, 2008. Online. Internet. Accessed April 26, 2010 at http://online.wsj.com/article/SB123008280526532053.html That logic is exactly backwards. As President-elect Barack Obama and his economic advisers recognize, countering a deep economic recession requires an increase in government spending to offset the sharp decline in consumer outlays and business investment that is now under way. Without that rise in government spending, the economic downturn would be deeper and longer . Although tax cuts for individuals and businesses can help, government spending will have to do the heavy lifting. That's why the Obama team will propose a package of about $300 billion a year in additional federal government to do the heavy lifting....
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