CBO report on federal deficits

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**Frazzled**

http://cboblog.cbo.gov/?p=328

**youngblood**

Yikes... 200% of GDP? Time to tighten the belt America!

**BrookM**

New announcement from the Prez: let's go on a diet people!

**youngblood**

This is an example of why the government needs to stop trying to regulate everyone's lives. It costs too much.

**sebster**

youngblood wrote:This is an example of why the government needs to stop trying to regulate everyone's lives. It costs too much.

The deficit has nothing to do with regulating anything. The deficit spending is the standard response to an economic shock that threatens to drop aggregate demand.

**barlio**

I saw the first graph then just gave up on the article.

**Frazzled**

sebster wrote:
youngblood wrote:This is an example of why the government needs to stop trying to regulate everyone's lives. It costs too much.

The deficit has nothing to do with regulating anything. The deficit spending is the standard response to an economic shock that threatens to drop aggregate demand.

Usually, as in China's case, deficit spending is done on capital investment, not on pork projects or long term gimmees.

Regulation generates the need for new bureaucracies, new programs (cough cap and trade/healthcare cough) which in turn beget new bureaucracies and new regulations.

**sebster**

Frazzled wrote:Usually, as in China's case, deficit spending is done on capital investment, not on pork projects or long term gimmees.

Regulation generates the need for new bureaucracies, new programs (cough cap and trade/healthcare cough) which in turn beget new bureaucracies and new regulations.

Its nice if the money can be put to infrastructure, but if the intent is to just get money circulating then spending is spending. Remember Keynes' example of paying a guy to dig a hole and another guy to fill it in again.

**Frazzled**

Thats rudimentary thinking. If you are going to spend greater than your budget you have to spend in areas that will have multiplier effects out of proportion to short term and long term costs.