I'll agree with some of what you've said, Mitch, but cannot agree with others.
Debt... Yes, we have it. We've had it since our own revolution and the money we owed the French for helping us out. But the federal accounts are NOT like Joe Public's credit union account regardless of how the Senate wants to try to dumb it down to score political points.
There is good debt and bad debt. Bad debt buys a liability. Good debt buys an asset that returns more than the value of the debt and interest. Most Americans with their cars and big screen TVs own bad debts - there's no way these things will ever increase our net worth. Businesses tend to invest in equipment - and when they borrow for a new piece of infrastructure, they fully expect it to pay back more than it costs. Modern governments should have larger gross domestic products and also larger levels of debt - and this can be seen in this graphic:
http://www.economist.com/content/global_debt_clock Hey - Ivory Coast's debt is falling - do we really think we want to 'go there'?! (As an aside - it's debt VS. GDP - and since we're in a recession (depression?!) the GDP side of things falls off - making the ratio look worse than it will when we recover.)
Look at TARP and other recent bailouts. Some of those paid back more than they cost us - they brought a direct profit. Good debt, those. Others like GM (sorry GM) haven't yet paid for themselves. And yet - even if GM's bailout account hasn't shown a profit (and may not), what is the effect on the economy by keeping the company alive? How much tax income would we have lost had GM and all of the chain of suppliers fallen off-line? And how much larger would unemployment and welfare liabilities have become? Maybe it returned a net profit after all.
Another difference between the Federal government and Joe Public is what happens when we each spend a dollar. If we listen to politicians and politician wanna-bees, we might get the message that if we tax $1 from a business ("take $1 out of the economy") and then give it to another business or to Josephine Public, that it's a net wash - $1 out plus $1 in = 0 gain. That applies to us - yes, take $1 from Mom and give it to Sonny the household's net worth is the same. But this is NOT what happens with the government.
When the Fed releases $100 into the money supply, or when the government sends out a $100 in stimulus payments, it multiplies thru the system - and it returns MUCH MORE than $100 to the Federal Government in taxes - and increases the GDP across the board.
In addition, Joesephus Public cannot assemble their debt and SELL IT to other entities the way governments and businesses can.
The Federal Reserve banking system is independent of the politicians and is tasked with stabilizing the national economy and helping us achieve full employment. The president and congress are also supposed to be stabilizing the nation, providing for the common good, and stabilizing us on full employment. But as we've seen, the Fed can't move the economy by itself when part of Congress is pulling the other way.
We can fix our problem by cutting, as long as we think it's ok to start hacking and slashing during a recession/depression. [Look ma - our debt levels are lower! Yay us! Um, Sonny - who's left to spend/buy us out of the depression now?] We can also work to increase income. That means putting people to work. Jobs means a salary which means spending and tax payments and that will bubble thru the entire economy. Supply-side isn't working because no business in their right mind is going to spend or hire until we're pulling out of the recession and people start spending again. And massive amounts of unemployed people don't have the cash. Supply side will drive us more deeply into recession, while demand side will pull us out.
The far right has one self-proclaimed goal - to make President Obama a one-term president. Many have also signed a 'no new taxes' pledge concocted by a Republican strategist. As far as I'm concerned, those that have signed the pledge have taken an oath that directly conflicts with their 'other' oath - the one that requires them to support and defend the Constitution and people of this nation from all enemies, foreign and domestic - and I'll suggest that if they were subject to the Uniform Code of Military Justice they'd be guilty of treason. Good thing they're not, I guess. Regardless - those in DC that are working in opposition to the betterment of the nation as a whole should be required to forfeit all pay and allowances, their tax-payer subsidized insurance and retirement program, and summarily run out of town (or dragged to, say, central Illinois by at least two large horses). (Of course, I mean this in the nicest sort of way...
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I resisted economics for a very long time...but can highly recommend a semester of college macro econ. Toss in a US politics/US government course for good measure. I promise you that it's just like buying a large industrial size barrel of "Put the Smoke and Mirrors Away, Silly Politician and Sillier Wanna-Bee" and spraying it over DC from the belly of a B52. :lol: