Every recession or depression--none excluded--over the last 221 years was preceded by a government surplus (but not national debt; as I said earlier, its elimination occurred only once in all of American history--1835-37). The Clinton budget surplus of 1998-2000, itself, ended with today's recession, only delayed by the massive consumer debt amassing then and during 2000-2006. In any case, the need for tax cuts and large budget surpluses, instead of reduced spending and higher taxes, is what the U.S. economy must have in the short-run. Surely we can look to the Hoover budget to understand the potential dire aftermath. I understand some people's concern that the spending spree and run-away consumption (which is historical for our capitalist economy, whether government, corporate, or private) is the reason we are living in a civilization that seriously looks doomed--as it takes consumption (and environmental destruction) as its birthright.
The much bigger question is how government, corporate, and private spending articulate with what, if we are paying attention to what scientists are saying about the question of human survival. From many quarters the scientific message is that civilization is headed for disaster. The regressive political crowd denies it all. The average person has no clue.
What is even more interesting is the macroeconomic model many (including Bill McKibben) are assuming is the way to go. It is the model for which Herman Daley, in the 1970-80s, was the foremost proponent, sometimes called "steady-state capitalism."
It should be obvious that the capitalist system is SYSTEMICALLY based on growth; a "no-growth" capitalist system is a contradiction, an impossibility. For many reasons--actually, for every reason--at all levels of the system growth is organically constituted: from the CEO who does not own the firm and must grow the firm for shareholders, to the consumer who must have growth for jobs, so must consume in a big (wasteful) way to promote jobs. We have an economic system that is as efficient as can be (for productive forces!), one that is efficiently liquidating planetary resources--from mountaintop removal to strip-mining of the oceans. From Adam Smith to Karl Marx this was understood. In fact, for Marx, the market-propelled internal motor of growth was what so sharply distinguished the capitalist mode of production from all previous. It must constantly expand markets, constantly expand consumption. It is an iron law of capitalist development.
Where dos this leave us?