Congress Reaches Debt Deal

The deficit isn't a representation of what the government is doing. The majority of the equation comes from the fall in tax revenue due to a shitty economy, the rest from automatic stabilizers. The stimulus ran out a year ago, and was heavily weighted to the first year, and half of it were tax cuts, which do dick in deep recessions.

Also, not all recessions are created equal, balance sheet recessions can take years to, as you say, work themselves out. And that is unnecessary.
 
My point is that we're not technically "spending" anything. A good chunk of the deficit is simply lost revenue, so we borrow to make up that difference.

Unemployment benefits, food stamps, etc only have minimal effects, and at best simply maintain consumer housing/debt/necessity payments, but don't actively promote economic growth.

The Bush tax cuts are also still a big part of the deficit, but as I said, tax cuts don't help in deep recessions since it's typically saved by people who prefer the safety of money in the bank, even those in relatively safe/stable lines of employment.

Active spending, or more accurately stated, active investment, would be infrastructure employment or other activities where the government can ensure that the underutilized capital from consumer and business savings, is put in to the economy, this should bolster aggregate demand and give businesses confidence that the demand will be there to justify their own investments.

It's really not that radical or much beyond common sense, but this country is retarded.
 
Also, and most importantly, the deficits are temporary and the market knows it, which is part of the reason why we can borrow for 10 years at ~3.5%, or whatever it is now. The economy will eventually recover and tax revenues will make up part of the decrease in the deficit, also the spending on automatic stabilizers will come down with a better economy. So whether the deficit is $1.6T or $16T, doesn't really matter. Our long term solvency is more of a problem, but is actually easily solved for people with common sense, but it's pretty unlikely that Dems vs. Reps can do it.
 
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