There's nothing wrong with deficit spending to fight a major war or a severe recession. It's supposed to be an emergency measure; the problem with it is that it's become SOP. In good times, the budget should balance, but you can't balance it in times like this.

One very good sign to my way of thinking is that Obama clearly isn't going to make Roosevelt's biggest mistake: his ignorant statement that "we can't spend ourselves into prosperity." John Maynard Keynes told FDR that he needed to spend a whopping big load of cash on public works in order to jump-start the economy. Roosevelt refused to do that for years (it may also have been politically impossible). But he proved Keynes was right when he finally did do that, in the effort to fight World War II. Everyone knows the war ended the Depression, but few economic conservatives seem willing to draw the logical conclusions about HOW the war ended the Depression: not because of some magical effect of war, but because it forced the government to finally give all the unemployed people good jobs at public expense.

Over the four years of war, with most people making good wages while the economy was tightly regulated and consumer goods rationed, consumer demand accumulated. Money piled up in the banks and in war bonds. People made do without new appliances and cars, with rationed gasoline, food, and just about everything else. Some economists (who still didn't understand demand-side thinking) assumed that when the war was over and the military demobilized, the Depression would return.

They were wrong. Why? Because of all that pent-up consumer demand. There was a HUGE market for consumer goods, and as soon as industry retooled to make them instead of making military gear, the economy soared. And, because of the structural changes in the economy that had been made during the Depression, the growth in unions, and new labor-friendly policies in business, wages grew right along with profits, increasing consumer demand even more, which further increased profits in a pattern known as the "virtuous spiral." This is a lesson we need to re-learn.

But the point here is that what FDR finally did in order to fight the war, he could have done much sooner if he and Congress had been willing to spend the money in peacetime that was finally spent on the military. He didn't, and that's why the Depression lasted as long as it did. Obama apparently isn't making the same mistake. This is good.

I agree. Does Iraq really need 10 billion dollars of american tax money every month?

Andrew

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“...corporations and those who run them cannot stop exploiting resources and amassing wealth until they have... .I cannot finish this sentence, because the truth is that can never stop; like cancer, they can only continue to expand until they kill the host.”

-- Derrick Jensen

I can. It was at the end of the Clinton Administration. There was a surplus, as a matter of fact that was a start on paying down the National Debt, and then came BushCo 2 along with controll of both houses of Congress.

The National Budget, Debt & Deficit :: MarkTAW.com

Maybe, The illegal aliens here require a like amount. Just think, three months of their giveaways would bail out the Big Three.

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I needs government help to live.
I must be a liberal.

I think you could even create a fund for future bailouts as they seem to be needed every decade or two now...

Andrew

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“...corporations and those who run them cannot stop exploiting resources and amassing wealth until they have... .I cannot finish this sentence, because the truth is that can never stop; like cancer, they can only continue to expand until they kill the host.”

-- Derrick Jensen

If only it were that easy. There is a price to pay outside monetary value, when you decide willy nilly to give government money away or that is taxpayer money.

Right now there are still plenty off folks that don’t understand WHY we got here, and don’t think there is really any downside as to their ability to live along the same lines on a day to day basis as this goes on, if suffering is the only way to wake them up, then maybe that’s what’s necessary. Apparently it is.

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"The captain has turned off the `No Dubbing' sign. You are free to speak any language you choose."

Because neither side wants to cut out their pet projects. The neocons don't want to stop their wars of aggression and the liberals need to keep handing out welfare to the illegals and scumbags who vote for them. I'm guessing you won't find many people on this forum that both oppose the war and oppose welfare. And that's the problem.

As we get more details, it look like congress is going to have it ready for when Obama takes office. It will include his middle class tax credits, and lots of spending (which is now called a stimulus). Primarily more roads, which will increase gas usage, and funding for alternative energy, which will decrease gas usage. So as usual, instead of just giving money back to the people, and cutting spending, democrats will increase spending, and deviating from usual behavior, not raise taxes, which means huge deficits.

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"To take from one, because it is thought his own industry and that of his father has acquired too much, in order to spare to others who (or whose fathers) have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, "to guarantee to everyone a free exercise of his industry and the fruits acquired by it."

-Thomas Jefferson