Government actually has the following ways to solve the current economic problem :
* Increase spending, increase taxes ( Krugman’s solution )
* Increase spending, decrease taxes (Bush’s solution when he first took office )
* Decrease spending, increase taxes ( the European solution )
* Decrease spending, decrease taxes ( The Steve Forbes Solution )
I don’t think the Forbes or Bush solution is on the table anywhere.
RE: We’re already in a recession
Well, a recession is defined as two or more consecutive quarters of NEGATIVE GDP GROWTH. If we are to believe the reports, Q1 of 2010 showed a (Downwardly revised) GDP of 2.7%. Yes I know, it’s unsatisfactory and too meager an increase, but hey, definitions are definitions. Based on this definition, we came out of the recession in Q1. SMALL COMFORT THAT IS.
+Q1 = Government Spending
Q2 > Q3 Modest improvement due to profits pushed into 2010 to avoid 2011 taxes.
2011 - Lookout below!