It's obvious government spending had to decrease and that's what should happen after the country is somewhat back on track and growing. But did WWII and (thus d

It's obvious government spending had to decrease and that's what should happen after the country is somewhat back on track and growing. But did WWII and (thus deficit spending) not get us out of the great depression? It's obvious the quality of life wasn't great when you had people forgoing resources to fund an important war. The growth after the great depression came as a result of the Cold War when the US started spending on nuclear technology, missile defense, what have you. The US also invested on its citizens and education with the GI Bill among others, etc. This does not refute my point--and that is, to clarify, perhaps, that the problem isn't government spending, it's what it gets spent on. Only the market can evaluate the true cost of things? This assumes markets have all the information or that someone is willing to invest the money to obtain it--otherwise you have an inefficient market. Here's where for the good of all, some central body like a government, can put in the cost to find out or to avoid a market collapse. For example, what would have been the cost of letting AIG and major banks fail? The markets wouldn't care since every individual would be concerned with their losses in the panic. That is, the markets aren't always as rational as people make them out to be--you know this. To argue otherwise is as idealistic as well, you name it. In fact, your last point validates this point. The cost of not passing TARP and the Recovery act would have been passed on to us--and some argue, and I believe, such cost would be greater... also, assuming you can control spending when the country is back on track (due to debt). So either way, we're paying... might as well, then, ensure our financial system is stable and that we can continue to invest in education and green technology instead of risking an entire system collapse as we ensure our economy grows. When interest rates are at 0% and the country isn't growing, something has to give. Cutting government spending is stupid. If you're running a business how's a tax break going to help you? Will you keep people employed? Not very likely. So as employment continues to rise, more people freak out, and more people are let go. Is that the kind of downard spiral we want? This is when a government needs to step in and say, no.. we're keeping these jobs, we're creating some here, otherwise, who's going to take the risk? There's a psychology to this, I think, that often gets lost in "market analysis." People who are uncertain about the economy will stop spending, so how do you promote spending? By giving them a few hundred dollars without ensuring that their job isn't going to be there a year or two from now?