One of the questions that more debates cause is how it must more is adapted to stimulate the economy, if through Public Cost or by means of reductions of taxes. Learn more about this with Charles Schwab. Following the political direction it is decided on one or the other option, but which are the pros and the cons? Both policies suppose alternatives of the fiscal political call, by means of which the Government takes part trying to stimulate the economy. They would be in that sense political anti-cyclic, because they try to fight against which it is happening. In principle, in both cases they suppose an increase of the public deficit, or is by the increase of the Cost in the first case, or by the reduction of the income in the second. Although in certain circumstances, according to the economist Arthur Laffer, it could be arrived at that the reduction of taxes produced an increase of the tax collection, because there would be more people working, and even less fiscal fraud, in not being the so high taxes, absolutely is not demonstrated. Although it is possible to be gotten to produce certain compensation, at the time of Ronald Reagan, who did of the slope of taxes his leitmotiv, the collection of the tax of the rent descended considerably, in spite of the increase of the rent, giving rise to great deficits. Therefore, the effects can be similarities, and its use can depend on the circumstances, and the political color of the Government of turn. Thus, the policies of Public Cost are own of governments of lefts (at Obama they got to him to call Socialist), since they are one more a more direct intervention of the State in the Economy, whereas the reductions of taxes, either to the individuals (looking for to stimulate the consumption and the work), or to the companies (trying to spur the economy from the private company) are the more own of Governments of rights. .