A Simple Graph That Should Silence Austerians and Gold Bugs Forever

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There is a significant difference to be considered here, that being between the difference between simple government spending and government investment. Too often the latter is thrown out as the proverbial baby in the bathwater. Feeding the baby helps grow the economy. It's all about the proper diet. There are many things best done on large scale together.

Yes, and in a recession, some public spending goes up automatically, like unemployment benefits and food stamps. But these actually help stabilizing the economy (hence the term automatic stabilizers) and I'm not sure whether the alternative is attractive (that is, leave these people to their own devices).

Also, in recession, tax receipts fall (as income, spending, and profits fall and taxes are proportional to these), so the public deficit automatically increases.

Now that the US economy is recovering the deficit is sinking fast, which is why I was never really that worried about it in the first place.