Forum Post: Budget deficit and how to fix economy

Budget is government's spending plan. Government spends money on social security, medicare, defense etc. Government also collects taxes.

When spending is larger than taxes - it is called budget deficit. The sum of all deficits is called "national debt"

If government spends more than it taxes - is the public getting richer, or poorer? It is getting richer.

If government taxes more than it spends - the public is getting poorer.

So is budget deficit good or bad? It is good. In fact we have large unemployment BECAUSE the deficit is too SMALL!

Just remember that.

What would fix economy right now: 1) Government should offer to employ all unemployed - AND THAT IS THE MOST IMPORTANT POINT 2) Government should provide public free (or almost free) healthcare 3) Government should guarantee social security 4) Government should improve public transportation (to save fuel and provide real alternatives for commute other than owning a car) 5) Government should provide public free (or almost free) childcare and elderly care 6) Government should provide public free (or almost free) education 7) Social security and medicate taxes should be cancelled 8) Government should protect energy grid and concentrate on renewable energy

In case you are wondering how will it be paid for - the answer is: the same way that bank bailouts were paid for, the same way that wars are paid for, or the tax cuts for the rich are paid for: by government spending. The U.S. government is not limited in its spending - except by self imposed rules. The danger of overspending is inflation - which can always be fought by increasing taxes. However, before inflation would really threaten - the unemployment would be eliminated and economy would be growing fast.