Reply #77: The problem is, larger deficits really aren't an option

[MajorChode]

In a recession economy, it makes sense to cut taxes and run deficit spending to increase the money supply. Once you're out of the recession, you raise taxes again and pay your bills. The problem is, Bush borrowed money to give the richest Americans tax cuts, twice, in a non-recession economy. So now excessive deficit and debt is killing the economy, which takes the tax cut option off the table unless a commensurate or greater spending cut is made. Tax cuts are what got us into this mess and they aren't going to get us out.

The option proposed by Obama, as I understand it, is to instead restructure the tax code so that the richest Americans, who are categorically undertaxed, are given a tax increase while the poor and middle classes are given a tax cut. While this may not increase the money supply, it does put money in the pockets of those most severely affected by the recession and it does encourage spending. So while it may or may not get us out of the recession any faster, neither do I think it will do more harm.