First, we need to understand what the REASONS are to fear a deficit:
The biggest fear is that the credit will run out and we'll see the dollar devalue.
Ok...
But how likely is that to happen when the debt of AMERICANS is shrinking at a far greater rate than the debt from the American government is growing. We're all pounding our debt down because the credit market has frozen, and we often don't have any choice... this is in fact the reason that our economy crashed - the growth for the last 5 years or so has been exclusively based on an increase in debt from Americans.. so when the credit crisis hit, we had no more debt to use to "grow" our economy...
But we're all reducing our debt.
Most economists think that deficit spending is the best way for the government to help bring us out of a recession... that's what the government is doing, and there's an argument that says that it's working. We know that credit won't run out as long as the debt from average Americans is still reducing faster than government's debt is growing... and we know the deficit spending is indeed helping us get out of this mess.
What's the next fear: Huge debt burdens?
That's a joke. How many people posting here would turn down a loan that was offered at less than 1%, and would not grow passed ~3-5% interest over the next 10 years. I'd take a billion dollar loan at that rate, because I believe inflation will excede that rate, and I'm CERTAIN I could beat that rate through even half-assed investing over the next 10 years. Government is investing money into our economy... They aren't the world's best investors, but they can (and are) beating the current interest on the bonds... and until the rest of the investors step up and start investing more into America, our economy will crumble without the government's deficit inducing investments...
Before we react concerning the deficit... we need to understand WHY we are worried about deficits and debts... and determine whether that makes sense in today's specific situation.
For the record, I was screaming about the debt and the deficit during every period of GROWTH that we've encountered over the last 2 decades... because I believe you're supposed to pay down your debts when times are good, but when times are tough, it's ok to go into debt a little, or increase debt a little.
On a personal level, if you lost a job, would you increase your debt to pay the bills until you got another job, or would you just let your life crumble, or let your car be repo'd, and maybe let yourself be rendered homeless?
