Clearly, this is a challenging subject for good God- and Debt-fearing Americans to understand so I will try to put it in common sense, Joe-the-Plumber-style English.
Although the Republicans claim to be the one with 'common sense' and 'business sense' rather than these pie-in-the-sky hippie Communist Democrats, they are apparently unable to grasp the most basic fundamental business and economic principles.
Yes, what seems immediately obvious that you should do when you are in debt, cut spending, is not necessarily true in the real world of free market competition.
Households are not businesses, and countries are not households. Countries are a lot more like businesses than they are like households.
For an example, if you have a business that is suffering in the recession, you could slash spending, fire workers, cut hours, cut services etc. But all this may in fact cause your business to simply shrink and never come back, because simultaneously your better capitalized competitors are able to take some losses in an attempt to gain market share from you.
In fact, though it is obviously a risk, it may be most prudent to take a loan, yes modify your businesses priorities, and perhaps cut the profit margin, but aim to gain customers from the other businesses who are stupidly simply decreasing their standards of service in an attempt to survive.
To survive in the free-market, it is not enough to simply survive, you have to beat your competitors, at all times, in all seasons, or they will destroy you.
Similarly, the US cannot simply cut all spending and shrink the government to nothing as Republican Tea Corp would like.
To do so will cause us to fall behind further in the world to a point that we may not recover from, with stiff competition from China etc.
The Tea Party has a valid point that the US is too dependent on debt, yes, they do. However, they are many decades too late on this point.
In fact, it has been the Republicans, esp. Reagan and Bush II, who have created this mess, by allowing huge deficit growth in the good times, which was the right time, as every good and seasoned businessman knows, to save money and pay down debt.
As a Spanish proverb says, the "times of the skinny cows" (el dia de las vacas flacas) is always around the corner and THAT is when the real winners make their moves for long-term sustaining success, as Warren Buffett often tells you, by spending when everyone else is scared to or unable to.
It's not a good situation thanks to the Republicans of the past 30 years, it's not good to have to borrow through a recession when you are already heavily in debt. This is precisely the kind of company that usually goes out of business and Warren Buffett would not buy.
On the other hand, there are always the intangible assets of a company: a brand, a leader, an ideal, things that cause people to invest in them even when they show no fiscal responsibility and very little business sense.
This is exactly the kind of company Buffett does buy, but he goes in and reorganizes them with his very left-wing mindset.
This is the kind of company the USA is, for myriad of historical reasons, and that is why we will be able to get out of this mess even if we have to go in debt up to our eyelids.
But the longer we let the know-nothing, proud to be uneducated right-wing control things, the longer the suffering will be, the more often these crashes will happen, and perhaps one day it really will be too late for the USA.
Unfortunately the knee-jerk masses only want to gyrate from one extreme to the other always too late and make everything worse than it is, just like watching a stock market crash, and only a few have the intelligence and perseverance to come out on top in the long-term.
