Stop worrying, you must be a liberal.

No, the deficit hawks are not wrong. They're completely right. The deficit is out of control. What they're wrong about is why its out of control and how and more importantly when to solve it.

Our problem is not Obama's stimulus spending, it's the institutional debt that we start with before any stimulus. And the solution to that is not to spiral into depression by not stimulating the economy. The answer is to get the economy on track and then after we are back on our feet cut spending to reasonable levels and that can easily be accomplished through simply dealing with our addiction to insane military spending.

The boys with toys need a big haircut.

"Odder still that the Debt Scare returns at the precise moment that bills are emerging from Congress on universal health care, which, by almost everyone's reckoning, will not increase the long-term debt one bit because universal health care has to be paid for in the budget. In fact, universal health care will reduce the deficit and cumulative debt -- especially if it includes a public option capable of negotiating lower costs from drug makers, doctors, and insurers, and thereby reducing the future costs of Medicare and Medicaid."

I can certainly see a scenario where effective health care reform reduces overall economy-wide health care costs, at least below where they would otherwise be.

But saying that it won't increase the debt one bit because it has to be "paid for" (presumably by budget cuts elsewhere, or by tax increases) is just sophistry. It's like saying that buying an expensive TV has no impact on the family debt because you'll take a second job to pay it off.

This assumes, falsely, that the two are completely intertwined, when they're not. There's nothing stopping us from making those budget cuts and taking those tax increases, and NOT spending the $ on universal health care, but rather using it to pay down debt. Additional spending increases the debt from where it would be, period.

This isn't to say that universal health care isn't a good thing to spend money on - but to imply that we can essentially get it for free isn't intellectually defensible.

Oil production (all liquids) peaked most likely in July 2008. Our economy runs on oil and the U. S. has $50 trillion in debt (most of which is NOT government debt, by the way). This means, in effect, that the economy cannot grow. I agree that the government needs to do something and it means massive intervention. I agree also that "the debt/GDP ratio could really get ugly." I do not agree that the goal of government intervention should be "getting back on a growth path."

Growth is impossible in any case and will just make the situation worse. We are dealing with the "limits to growth" right now, pretty much as the Club of Rome predicted in the 1970's. Too much of our economy depends on liquid fuels. Even if we were to pitch attempts to deal with global warming and go with coal-to-liquids, we cannot deal with this without massive infrastructure changes for which we would need 20 years lead time -- see the "Hirsch Report." Solar, wind, and electric transportation might take even longer and cost more (very few electric cars, electric grid is weak, solar and wind combined less than 1% of U. S. energy production). And after oil, you have natural gas and coal to deal with, where we face a similar situation.

We should definitely ramp up solar and wind, by the way, and strengthen the electric grid. But we cannot continue living the profligate, consumptive lifestyle that Americans have come to expect for the past half-century.

Two excellent web sites to check out:

Gail Tverberg's financial forecast for 2009 -- excellent overview of the debt problem

http://www.theoildrum.com/node/4915

Chris Martensen's "Crash Course" -- watch the video; a lot more detailed, takes over 3 hours to watch the whole thing, but very informative

http://www.chrismartenson.com/crashcourse

Large government debt is a problem. I don't think that it is scaremongering to say so. While the post-WWII debt-to-GDP ratio of 120% was higher, immediately following WWII was a time of unique competitive advantage for the US (all other major industrial nations had their industrial infrastructure decimated by the war) to help pump up the American GDP to cover that debt. We are unlikely to see the same kind of boom in 2012 to cover this.

That being said, going into more debt, for the very short term to fund programs to help recover from the recession is probably the right thing to do. Like the indebted family borrowing more to send their kids to college, the benefits outweigh the costs. But also like that family, we at the very least are not going to sleep as soundly with that extra debt handing over our heads.

I've always enjoyed your commentary, here and on NPR.

Why is it that the elite talking heads couldn't bring themselves to be scared during Nixon, Reagan, Bush I, and Bush II, all of whom increased the deficit and the debt to unimaginable levels? But, as soon as liberals start threatening to help poor people, we're all going to go broke?

This game is becoming very, very tiresome.

"Reagan taught us that deficits don't matter."

Let's look at it like this. You have multiple credit cards - let's say 5 or more. And they are all maxed out. Now, you also have a mortgage and 3 cars you are paying off.

Now, you have a fixed income and want to get out of debt. What do you do?

The first thing ANY financial planner will tell you to do is to stop spending money and start paying more on your bills. No one ever spent their way out of debt...not even the government.

At any rate, why worry? Obama says we're ok so we must be, right? So the deficit continues to climb but were told "Don't worry, be happy" and to continue to party on...because everything's ok.

When the final bill comes due, you'd better be ready. My suggestion is to pay off all your bills as quickly as you can and do NOT make any more debt for yourself. The inflation rate at the end of the year is going to be horrendous too!