Yes Marri... But wouldn’t raising taxes reduce spending /...

Yes Marri...

But wouldn’t raising taxes reduce spending / consumption ?

With wages stagnant, if for eg. the Aus Govt wanted to raise money quickly so increased GST by 2.5%, the consumer is not going to spend 2.5% more...

Us little people are not getting a pay increase anytime soon, so we will simply cut our spending...

It then becomes a negative feedback loop does it not?

So how do you pay back the debt without collapsing consumption, and in turn small business which then threatens the rest of the economy ?

I don’t see how raising taxes helps the current economic situation in a positive way.

And this could be why some people invest in gold.