Deficit Spending

[The Vegan Marxist]

I was reading an article about deficit spending, & it's through what the site considers itself pro-Marxism-Leninism. The article is here:

http://mltoday.com/en/subject-areas/commentary/the-debt-scam-844-2.html

In the article it states that:


"The fear of deficit spending and government debt is, like so many other contrived panics fostered by the rich and powerful, a fantasy. There are no immediate or, necessarily, long term dire consequences to deficit spending or growing national debt, as economist Dean Baker has hammered away for years. By likening national deficits and debt to household budgets, pundits cynically create the fears that pave the way for the slash and burn policies embraced by both political parties. On the other hand, there are often compelling social reasons for increased deficit spending and larger debt accumulation - reducing unemployment, poverty, and poor health care and supporting education, infrastructure, housing, and other public services, for example."

Is this even correct? Or what?

[Armchair War Criminal]

Is this even correct? Or what?
The preponderant opinion among bourgeois economists - and there's plenty of evidence to back it up - is that short-term deficits are necessary for responding to recessions. It's also generally believed that long-term deficits will reduce investment rates, although the evidence as to how much is controversial. Thus most economists since Keynes have advocated running a deficit during recessions and a surplus during booms. Even since the retreat from Keynes into neoliberalism in the 1970s, this basic principle remains orthodoxy except among right-wing cranks.

[KC]

I think it's important to expand upon the above post by saying that the US deficit has been justified by many economists as sustainable up until the current crisis. Some have even advocated a "dark matter" theory, claiming that the US has actually been running a surplus that is due to immeasurable factors of economic policy.

[The Vegan Marxist]

I think it's important to expand upon the above post by saying that the US deficit has been justified by many economists as sustainable up until the current crisis. Some have even advocated a "dark matter" theory, claiming that the US has actually been running a surplus that is due to immeasurable factors of economic policy.

That would seem more plausible on what's taking place, because through the Obama administration, correct me if I'm wrong, there's been less deficit spending than there was during the Bush administration, in which our economy is not getting any better. We're seeing a decrease in the deficit spending during the repression.

[Armchair War Criminal]

That would seem more plausible on what's taking place, because through the Obama administration, correct me if I'm wrong, there's been less deficit spending than there was during the Bush administration, in which our economy is not getting any better. We're seeing a decrease in the deficit spending during the repression.
This isn't true; deficits have increased under Obama. What may have misled you is that in general economists criticized Bush for running too large a deficit and the current government* for running too small a deficit, since most of Bush's administration mostly presided over a boom period, while Obama came of office during a recession.

*Obama probably pushed through the largest stimulus he could, politically, so using him as a synecdoche for the government is less than accurate in this case.

[Sosa]

Only a fraction of the $700 Billion stimulus Obama passed has actually been used, which some Keynes economists have said, this the problem why the stimulus hasn't worked, because the majority of that money hasn't been put to use.

[RadioRaheem84]

Deficit spending has been a boom for one particular industry and that's the military. It has literally created a bastion of concentration of wealth that spurned growth in dozens of sectors associated with it. On top of that, the military finds ways to house, feed and educate many people soldier and civilian alike. It's central planning beyond anyone's wildest dreams in any capitalist society, running deficits higher than anything civilian spending can do.....yet right wingers say nothing about it.

Extend the spending to civilian life, stop worrying deficits. Like Reagan said, it will pay for itself. They were confident about that but were wrong. I am confident that it will pay for itself when extended to the vast majority of people who will pay back in.

[Victus Mortuum]

Only a fraction of the $700 Billion stimulus Obama passed has actually been used, which some Keynes economists have said, this the problem why the stimulus hasn't worked, because the majority of that money hasn't been put to use.

Well that, and it's just money that is directed toward corporate bailout (all in the name of "Jobs Jobs Jobs!" of course). It's money for corporations in the name of employment (simply because the corporations need employees to get paid to start purchasing SOME product again, at least until over-supply builds up again).

[Die Neue Zeit]

To answer the OP: look up the Chartalist theory of money. It says that, even in good times, deficit spending is necessary to expand the capitalist credit system.

[KC]

I really don't think the "bailout" was that effective. Several policies that they passed were effective temporarily, such as the housing credit, but those are only effective if they can sustain that growth until the economy recovers. They could also cause bubbles, although I think it's been shown that that isn't going to happen.

Anyways, I think the Fed's monetary policy has done much more to soften the original blow of the crisis than the bailout. Now, of course, they're having problems with trade wars that are about to break out, but we all saw this coming years ago anyways.