if the dems would agree to approve the sandy releif bill without any pork; it would have been by now. just more tax and wastefull spending that the dems have made this a political bs as usuall.
stop the waste and approve this now......

The reason the budget isn't balanced is because of the Bush tax cuts and the ludicrous policies of Bubba Bush that were instrumental in creating the financial crisis. For example, it was Bush's policies that encouraged GSE lenders like Fannie Mae and Freddie Mac to make loans to "sub-prime" borrowers. And it was those loans that then became the "meat" in the sh*t sandwiches that wall street sold as AAA rated MBS (mortgage backed securities). And it was when those MBS's started to disintegrate that Lehman went belly up and the rest of that 40 ton bag of crap hit the fan.

So if you want to start talking about assigning blame, let's brush up on our history shall we?

As far as paying our bills now, all we'd need to do is repeal the Bush tax cuts. That would stop the growth of the deficit in it's tracks. But nobody on either side wants to do that. And for the time being, that's actually the right policy. Coming out of a recession, you want to stimulate spending and you that through deficit spending. This IS the correct policy for the next few years. Absolutely the wrong thing to do is to cut back on spending. This is macroeconomics 101. I'm happy to explain why if anyone is interested.

But all of that is irrelevant to the present discussion. The debt ceiling is NOT a hostage in a war game between opposing ideological sides and the morons who think it is are going end up screwing us over if they persist in this idiocy since either they will take this to the brink - AGAIN - and we our credit will be down graded or we will default and our credit will be downgraded by even more.

Do you know what happens when your credit rating drops? Your borrowing costs go up. Now how do you think THAT will affect the deficit? So in the long run exactly how smart of a "tactic" does this really seem to you?

Bush did so many bone headed things it's hard to count them all, but as I said, that's irrelevant to the present discussion unless you somehow think that justifies the teabaggers holding our credit rating hostage.

As for spending your way out of a recession, I don't know where you went to school, but that's basic Keynesian economics as taught to me both undergrad and in my MBA program at Rutgers.

Now if you happen to be of the Austrian school, which I don't believe is taught in any accredited US school, that's a different matter, but as I said - macroeconomics 101.

It's really not all that complicated if you gloss over most of the details. It all revolves around the multiplier effect . If I get $100, I deposit that in a bank. The bank keeps $10 in reserve and loans out $90. All of a sudden there is now an additional $190 in the economy - the $100 I contributed plus the new $90 the bank has loaned.

The person who gets the $90 will also deposit it. His bank will hold back $9 and loan out $81. Now there is an additional $271 in the economy - my $100, plus the first loan of $90 plus the second loan of $81 - and so it goes.

That first $100 is what you could call priming the pump and as you can see it's essential to getting the economy rolling again. Coming out of a recession, it is the role of govt to prime the pump and spend to set the multiplier effect in motion.

The federal reserve can manipulate the multiplier as well and has been attempting to do that but with only limited success.

The Chicago school to which you refer would probably be the monetarist school of which Milton Friedman, an alumnus of Rutgers, was the father and which, unlike the Austrian school, is widely recognized as a valid and critical approach to managing the economy. To use very broad strokes, the neo-Keynesnians like Krugman tend to focus more on fiscal approaches to economic problems whereas monetarists tend to focus on manipulations of interest rates and the money supply. However both are integral and indispensable to a complete and robust economic strategy.

In fact, the efforts of Bernanke in attempting to push the economy into overdrive with monetary policy via quantitative easing have been nothing short of herculean. The problem is that his efforts depend on banks using the liquidity the fed provides to create new loans.

In the example I gave above, it's clear that the multiplier only works when banks lend. When coming out of a recession born of financial insolvency and deleveraging, the basic trust upon which lending is based has been impaired and thus a return to normal lending only occurs slowly and grudgingly.

As a result, even though there is about $2T in excess reserves in the accounts of banks belonging to the federal reserve system, little of that money has been used by banks to make new loans and therefore has had little effect in stimulating the economy. However by the same token, it has had almost no effect in stimulating inflation either.