Debate Economics 101: Growth, Stocks, and Taxes

Daniel Luo | Jul 28, 2021
4 min read

The Opinions Expressed In This Blog Post Are Solely Those of the Author And Not Necessarily Those Of DebateDrills

This is part of an ongoing series of blog posts where I talk about Debate and Economics. In this issue, I discuss some general misconceptions about macroeconomics in debate, with a specific focus on general macroeconomic concepts (mis)used in Debate.

Intro
It should come as no surprise that high schoolers are notoriously bad at economics. Ask any debater (even those who regularly read econ advantages!) something simple, like what the determinants of GDP are, or how perfect competition is defined, and they’ll probably be more confused than if they were debating a new variant of Baudrillard. The reason for this is pretty simple: most high schoolers have never taken a course in economics and, even if they have, their courses likely make sufficient unrealistic neoclassical assumptions [1] that they are accurate descriptions of economics as f = ma describes astrophysics [2]. I’ll be honest: I’m going to play the (positive) cynic, not the (normative) prescriptor. The name of the game is identification, not suggestion, because if I knew how to fix the high school economics curriculum enough to eradicate belief in “supply-side” or “free-market” [3] economics, I’d have said so long ago. Hopefully, with the following (including citations!), interested readers will start to gain a more sophisticated understanding of the economy. With that being said, here are some major pet peeves and unintentional errors I’ve seen debaters make when talking about the economy.

(Aggregate) Supply and Demand [4]
In a political discourse where “growth” is the name of the game, it’s not surprisingly most analyses of the economy are fundamentally Trumpian in their inability to divorce these two effects. Often, “growth” is seen to occur along a number line (where recessions are just “negative” growth). This narrative is alluring because it fits neatly into debate’s (binary) narrative structure: economy good now – plan makes it bad, which goes boom! The problem with one-dimensional narrative structures like these, of course, is that they end up confusing prescriptions for the economy. Anything that causes “growth” (regardless of underlying contextual factors) has to reverse the disad; anything that depresses growth thumps it. Debaters often aren’t able to tell you what flavor of recession they’ve predicted, which is problematic when they try to prescribe solutions. Oftentimes in debate, “infrastructure” [5] is seen as an advantage counterplan to economic growth, while “hiked rates” are seen as necessarily engendering a recession, even when they occur during inflationary gaps or demand surpluses. (I once had a TOC-level team explicitly say that the answer to demand-pull inflation caused by Trump tax cuts was to spend more money on infrastructure to stimulate the economy!)

It’s all About the Stock Market
Ubiquitous disads like the “business confidence” disad usually stress the correlation between the stock market and long-run macroeconomic indicators. While there is good evidence to suggest that the stock market and GDP are at least weakly correlated [6], their effects on one another not only take quite a while to realize but uncertainty in the stock market based on short-term information shocks actually imply that short-term perturbations in the stock market have little to no effect on the overall growth rate of the economy [7] (often a key internal assumption to economic decline). Aside from that, the terminal to many of these stock market disads rely on the infamous Tonnessen article about trade linkages—and, while stock market returns are affected by trade information8, the reverse causal relationship is much more unclear and likely doesn’t exist. All this being said, then, the probability that small perturbations in the stock market an aff is likely to cause won't have long-run effects on GDP sufficient to engender economic recession—and even if it did, the effects would likely be long term and take years to manifest [9].  

Down with Taxes!
This one is perhaps the clearest encapsulation of the psychological victory the alt-right holds over the public on economic matters [10]. Very often, debaters cut evidence from good-enough-sounding websites such as Forbes or the Wall Street Journal, or news outlets such as CNN, citing so called “TV-economists” blasting the anti-intellectual economic zombie of Reaganism and use them to craft arguments such as the Tax Cuts good politics disad (2017 was a simpler time) that imply tax cuts drive innovation and economic growth. This one is particularly insidious, I think, not only because it is patently untrue with economic consensus that higher taxes just about everywhere would be more socially efficient (subject to smart enforcement mechanisms) [11] but because it cements a negative reputation of the field of economics in general (this argument is not intrinsic to the debate community) as some neoclassical hellhole unconcerned with societal welfare. Such a perception not only leads to undernuanced and misrepresentative criticisms of economics by debaters, but also harms their long run view of the field, turning off debaters from every pursuing economic theory in any manner after they leave debate—and causing them to treat it with disdain long after they move on from the activity. By relaxing both evidence standards and comprehension standards for arguments that deal with the economy, debate ironically lapses into the same anti-intellectual, unrigorous analyses of issues that it not only avoids, but prides itself on avoiding, in most other areas it discusses.

[1] https://www.vox.com

[2] To be clear, not very good. https://ncatlab.org

[3] See https://aede.osu.edu/sites/aede/files for the general theory. For a secondary criticism of welfare itself, see http://web.stanford.edu/

[4] A quick sparknotes of the model: https://en.wikipedia.org/. Note AD/AS is a general model of economic growth; more sophisticated understandings rely on dynamic programming. A sophisticated treatment of growth can be found here: http://new.mmf.lnu.edu.ua/

[5] https://www.sciencedirect.com/

[6] https://www.msci.com/

[7] https://www.wise-owl.com/investment-education

[8] https://www.tandfonline.com/

[9] https://www.cbo.gov

[10] https://www.goodeconomicsforhardtimes.com/ (see: particularly Chapter 1)

[11] See: https://eml.berkeley.edu/ AND https://en.wikipedia.org/ AND https://www.brookings.edu/ AND https://www.cambridge.org/ AND http://ceg.berkeley.edu/ AND http://www.igmchicago.org/ (particularly “comments”) etc. Duflo & Banerjee, Chapter 8,  (see footnote 10) have sufficient citations for further reading

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