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Without a surplus, and without just printing a batch of bills specifically to fix today's problems alone (with the accompanying problems that follow that sort of clusterfuck), deficit spending is the only way to proceed.



Deficits aren't financed by printing stacks of dollar bills. It's done by selling bonds to the Chinese, Arabs, etc, and those bonds have a due-date and carry interest.




I didn't state they were -- I specifically used words to imply that apart from having the money (surplus), or 'conjuring' it up (printing it), that owing it to someone else (deficit spending) was the alternative. Maybe you thought I meant running a deficit meant printing it, but I don't, and didn't.

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And in any case the budget plan doesn't include money to "fix today's problems". *That* will be over and above the budget plans. Also the budget makes revenue assumptions that the recession never happened.

All of which means that taxes coming in are likely to be a lot less than expected, expenditures a lot higher, and the deficit estimate much too low.




Wouldn't 2009 budget assumptions follow in line (or near) 2008 numbers, in which the economy wasn't exactly stellar either?

The money I was referring to for fixing today was the proposed stimulus package, adding more debt to the overall totals (whether you calculate it alongside this year's deficit, or keep it separate and tack it on the overall national debt). More money the USA doesn't have, either way.

There are some really nice graphs in IOUSA, where they project how in 2050 or so, all US federal money gets budgeted to pay social security, and service the debts. All other programs would be terminated or unaffordable.

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On paper anyways, spending it on infrastructure and rebuilding seems sounder than Reagan's huge defense buildup.


That's not clear. FDR used military spending at the end of the 1930s to get the country out of the Depression. The Infrastructure projects earlier in the decade didn't do that trick.



Repairing the country's infrastructure is the more sound move to me, compared with spending on military ('defense'). I'm actually less concerned about whether the USA then ends up in a better financial position after this has happened, and more that critical projects at home get caught up with. That's how I justify saying infrastructure spending is worth going into debt.

FDR's WPA administration that carried out those infrastructure improvements also did little more than house, feed, and clothe many of the workers. Sure, there was a paycheck, but many of them ended up working seven days a week, and sleeping at the sites with no additional incentives towards productivity. This reeks of a 'make work' project more than anything -- busywork for the common folk until 'the economy' (nebulously controlled and finessed elsewhere) somehow managed to turn itself around.

Today's equivalent would likely involve more American contractors and engineers, with trickledown effects for American businesses, and labour probably performed by transient workers, than the citizen ditch diggers of the 1930s.