Won't government spending cuts also have an adverse impact on the economy?

[richardhutnik]

Kasz216 said:

Short answer... No.

Government spending isn't real economic activity.

It's like the owner of a used car salesmen bragging about his sales because he is buying 5-6 cars from himself a week on bank loans.

It's not REALLY doing anything except building debt.

The economy might LOOK worse, but in reality it won't be changed... and will be able to improve quicker.

 

Which is largely the big difference between tax raises and spending cuts.

One involves mostly the fake economy, while the other tends to directly effect real economic activity.

If you looked over the past decade, job growth was mostly through the creation of government jobs.  Now that the governments have cut back in the United States, the end result is that the job growth has really been immensely pathetic:

http://www.businessweek.com/the_thread/economicsunbound/archives/2009/06/a_lost_decade_f.html

 

I would question though about, "not doing anything".  If you totally got rid of all government, and the military, and courts to enforce contracts, and allow every sort of whim to happen, what would be the state of the economy of a nation?  In short, would anyone here argue that good governance has no impact on the state of the economy at all?