They need to do it the same way every stable middle class family does- by including in the budget some money to put away for the rainy day fund. It's not about raising taxes to do this, it's about realistically figuring the budget so that you don't spend 100% of the revenue you take in.

I agree. Do you have any ideas? The only two ways I know of for government to free up money is to raise taxes or cut spending. I know the conventional wisdom is that conservatives oppose raising taxes and liberals oppose spending cuts, but I actually am not totally opposed to spending cuts as long as the spending that's being cut is the spending that should be cut. Unfortunately, “cutting spending” always ends up being synonymous with cutting spending for services that help the middle class on down, and I don't support that.

And yet, we do it all the time.

What would have happened if we hadn't gone into Iraq? If we'd let Saddam stay? If we hadn't had the surge?

What would have happened if we hadn't bombed Hiroshima or Nagaski?

What would have happened if we hadn't tortured hundreds of human beings or detained them indefinitely with no legal rights? What would have happened if we hadn't spied on Americans without warrants?

How much is “without cutting much”? There's an argument to be made that if a service is needed, it shouldn't be cut at all.

My problem isn't with those 'rescue' parts- it's the fact that the vast majority of the stimulus (much of what hasn't yet been spent) wasn't progrowth either- in fact the CBO predicts that the long term effect will be to crowd out the private sector growth.

It may be to late to convince Obama to take a course that will grow the private economy. Although one would hope that looking how Reagan was able to spend more money because of economic growth resulting from giving the free market a chance to function. Most of the lines of GM that produced a profit have either been stopped or sold – leaving them in the same state as a professor with a lobotomy; now to survive they need corporate welfare; to sell their product they need somebody to put money in who is willing to lose it – Uncle Obama.

Carter and every president before him accumulated $1 trillion in debt. 10 trillion was added by Reagan, Bush and Bush, leaving us with interest on the debt as our 3rd biggest budget item. Every president from now on has to deal with that astronomical interest, so before even meeting any policy needs, we have to pay $245 EVERY MONTH for each taxpayer in interest. That doesn't leave much for meeting the needs of citizens, and that doesn't include ONE DIME for actually paying down the debt.

The only solution, returning top tax to pre-Reagan levels, is demonized daily and the very thing we need to run this country, tax revenue, has become such a 4 letter word that no one dares propose it. Result? More debt, more interest, and the end of American prosperity. Don't worry, though. The billionaires will be just fine. They always are.

In any case, in good times the goal should be near neutrality in terms of the budget. The states were holding up their end (despite unfunded mandates passed down from DC), and Bush was burning his.

This is true, certainly, but it does do a bunch of things that prevent future drags on the economy. For example, without the stimulus money, many more people would have lost jobs, meaning fewer people being consumers, more people losing their homes, more going on unemployment. Without the stimulus money, most states would have had much more difficulty in paying unemployment, which, again, would mean more people losing their homes, going further into debt, many would have ended up on the street that have not ended up there. These are not things that are easy to reverse once they happen, and in fact perpetuate the downward spiral of the economy. Something like losing a home because you've missed payments because you've lost your job or can't get unemployment takes all the wealth a person has built up and basically flushes it and the person's credit score. Once the economy recovers and that person gets a job again, that wealth is still gone, along with their ability to be a consumer. And that only counts the effects on that one person — it also flushes any bank profit and depresses the housing market, which flushes some of the wealth built up by those who *could* make their payments; it depresses the consumer market which of course means more jobs lost. And the cycle goes on.

So no, it doesn't create sustainable growth, and those parts of the stimulus weren't meant to– they were meant to keep the effects of the rapid disintegration of personal and corporate wealth from getting worse, to stop the free fall.

Because it's generally accepted that things that haven't happened yet won't affect an outcome. Speculation about it might, but the thing itself cannot affect an outcome until it has happened.

Makes me wonder about the other 43%, though…

Every president since WWII has paid down part of the WWII debt except three. Reagan, Bush and Bush.

Thanks for the link to that chart. I bookmarked it.

At any rate though, that has no bearing on whether or not they should put aside surpluses- in fact the existence of a balanced budget amendment would argue FOR putting money away for leaner economic times, since they can't deal with shortfalls through deficit spending.

Most states (except Vermont I think) have laws on the books that keep them from running budget deficits. So that means that rainy day borrowing can only come from the Federal government.

Jclmeme is worried that the debt incurred stimulating the economy is unsustainable. I'm sure that's true, but that wouldn't be such a big problem if Bush hadn't already added somewhere between $5-7 trillion to our national debt. The $800 billion stimulus is a drop in the debt bucket compared to that.