As I watch the news day after day all I see is another plan by Obama and Congress to spend more money on a new project or a new social engineering plan. The amount of money being spent is uncomprehendable to my tiny brain. So I try to equate things back to a household or a business, which I kind of understand. In a house or a business if you spend more money than you make long enough you will go bankrupt, but apparently our President and Congress have a plan to avoid this or they would be insane. So what is the long term plan to pay this money back.

Now I know some of you are going to say there was already 7-10 trillion of debt before Obama was president and that Reganomics were at least partially responsible for that. I think those are good points. I have thought through that and I realized that Trickle Down economics did stimulate the economy but still grew the national debt. The reason, I believe, is because Reganomics cut taxes, but it didnt cut government spending enough to overcome the loss of income from cutting taxes.

Anyway, enough of what I am saying. I obviously dont have the answers. So someone please explain to me how our Government can keep increasing spending and raising taxes and this not negatively affect our country in the long run. Even if you discount the effect of the debt, raising taxes will raise the price of our goods and services and make them less attractive to worldwide consumers.

Thanks for any help you can give me in understanding this.

The whole idea that congress and B.O. are following is Keynesian economics implemented during the Great Depression. According to this theory, deficit spending by the government has a "multiplier"effect on the economy as a whole thus stimulating savings and consumption.

In the Keynesian theory, The whole economy acts very differently than money issues for the individual because everything is intertwined. It is also believed that the quantity theory of money, that the more money in circulation leads to inflation, does not apply to deficit spending because there would have to be full employment, which we do not have.

This is what they believe and so far it has worked.

Personally, I think that it is just a bubble. There will eventually be a breaking point where the economy can no longer be artificially inflated by the government and the bubble will burst.

It just depends on who you ask on what the effects will be down the line. Like I said though, Keynesian theory is all the rage right now. People who don't agree with it are marginalized. Any Keynesian economist will tell you that we are going to have a great time of economic expansion once the money gets spent by the gov.

Hope this clarifies a little for ya.

It can't be. After the the New Deal was enacted to bring the U.S. out of the depression, there was an attempt to go back to a budget surplus. The result was another recession. Since then there have only been a couple of years of budget surplus.

The problem with this system (IMO) is that the economy is so reliant on government deficit spending that without it, it would collapse. Does this sound like a real economy to you? It just sounds like a mega bubble that everyone is trying to keep from popping to me.

I agree that the U.S. will probably have another boom period, but how much will inflation play a role? How much longer can the cycle be continued? How much bigger can it get? These are the questions that none of these economists are asking themselves. "WHERE DOES IT END??"

When Clinton left office the budget was balanced. After eight years without a president we find ourselves in this mess. So if you think the country's going to the devil, blame the Repugnicans.

You do realize, that everything would be even worse with McCain in power?

Instead of complaining about the president YOU chose, you should choose
more carefully next time.. and not just fall for their fancy campaigns and
populist propaganda shows. Use your mind for a change, study the programs
each candidate lays forward, instead of only watching what you see on TV
about the candidates. Because if you do that, you always let the richest
candidate win, regardless of how suited or unsuited he is for the job.

Use your bloody minds next time people, I can understand the education
you get in America being far below par of any other country, but at least
you have the internet to educate yourself. Use the internet, educate your
self.. don't let them keep you dumb and ignorant, educate yourself now!

All you have to do for that is click and read, click and read. Which I hope
is something everyone there can do! Don't let them cuddle you in your
laziness.. fight back, fight back intellectually.

The money in my wallet is U.S. Currency...it is a fiat instrument of debt. It's not attached to anything of real or intrinsic value. In fact it is ceremonial and part of a religious ritual hence...In God We Trust...written all over it.

The Federal Reserve was incorporated in 1914 as a Not for Profit Religious Corporation...The IRS was incorporated in 1918 as a For Profit Corporation...Social Security incorporated in 1934 is a For Profit Corporation.

The United States of America functioning at the moment was incorporated in 1988 as a Not for Profit Religious Corporation.

Well so much for seperation of church and state!

How can you screw up a system that is not real? The U.S. Currency has no value other than percieved value...a value that is honestly percieved the world over because if you don't percieve it we will just Nuke you flatter than a pancake or leave bomb craters, orphans and cripples from one end of your country to the other.

The economy is pretty much Parker Brother meets Jesus Christ in the Religious Edition of Monopoly.

Now anyone who has ever played the Parker Brother's board game version of monopoly knows one thing...it's best to be the banker...it's easy to cheat!

Umm, OK. Derailing aside...

If Bush and the republicans spent all that money and put us so far into debt, why isn't the U.S. in tip top shape?

If you look at what B.O. and the Dems are doing, they think that there wasn't near enough spending to support/boost the economy.

It just cracks me up how this theory of spending your way out of debt is so widely accepted.

It will end eventually people. The faster a nation rises to the top, the faster it will collapse. I hate to say it but I think the U.S Economy is like a firework, took off like a rocket and ends with a bang. With nation building, slow and steady always wins the race in the long haul. Keynesian economincs is all about the short term.

Or you could base it on gold or silver.

Say- That's a novel idea!