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The math is simple and the concepts are simple ... but obscured. If the Govt is not spending more INTO the private sector than it confiscates in taxes, then it is confiscating more money FROM the private sector than it adds. John Stuart Mill stated 100 years ago, recessions and depressions are all caused by an insufficient and/or falling money supply. You can find the precise quote. Why would any conservative want the OPPOSITE of tax relief and financial growth? ALL federal spending ultimately circulates in the economy as wages, salaries, profits, stock dividends, etc. unless and until that spending is removed from the economy by some means. Taxation is only ONE way our domestic Dollar supply is reduced. Imports --- including "outsourcing" --- favored by Big Business such as the US Chamber of Commerce and other "cheap labor" advocates -- brings inexpensive goods into America, usually via domestic corporations moreso than foreign importers or direct citizen purchases from abroad. Yet at the same time, US Dollars are DRAINED OUT of the domestic economy, landing in foreign-held savings accounts, Treasury Securities accounts held at the Fed. The simple point is imports reduce the domestic dollar supply that sustains both profits and jobs. Banks are thought to create loans out of savings of other customers, thereby shifting funds from savers to borrowers, from patient to impatient spenders, including business loans. Conservatives believe this but so does Krugman and many other liberal economists. Others believe that banks create loans on a "fractional reserve" basis, as a multiple of funds they receive from the Govt or Fed. All of that is a false misunderstanding. The reality, well-documented and not at all controversial, is that banks create loans "out of thin air" without direct regards to a "pool" of savings. To be more precise, banks write up legal contracts called Debt Obligations, which are ASSETS of the bank, and at the same time create new Deposits (loan proceeds) in Accounts, which are then the LIABILITIES of the bank. Of course these Liabilities or bank balances are typically transferred from the borrower to some Third Party, a house-seller or other bank, a car dealer, some other retailer. RESERVES -- fractional or otherwise --- are not at issue with lending, except for overnight INTERBANK lending, where Bank A loans reserves to Bank B to satisfy Fed requirements and to process overnight clearing of checks and payments. In that case, LESS reserves held by banks causes higher interest rates and greater profits on Interbank loans. The point of that explanation is that since savings by bank customers -- individual and corporate --- is NOT a source of bank-created credit, and savings is by definition "not spending" aka "unspent income", savings by US citizens and corporations is also a net reduction in our domestic money supply. Apple for example is sitting on many Billions in corporate cash savings, which is Billions of Dollars which are NOT circulating to create Demand, Sales, Profits, Jobs, etc. Expansion of bank lending --- not happening now or during any recession, since that is typically directed at Real Estate or other collateral, forming "collateralized debt obligations" (CDOs) which are assets of the lender, such lending DOES tend to grow the overall supply of Dollars "in circulation", but at the cost of increasing PRIVATE sector debt loads. We saw what happened around 2006-2007 and beyond, when the private sector debt load reached a peak of viability in the Housing Bubble, the supply of credit-money in the entire economy stopped growing and started to contract. Moreover, such credit-dollars can NEVER become "net savings" among private sector business and individuals for what should be obvious reasons. Getting a cash advance and putting that into savings cannot constitute wealth or "net worth". Each credit-dollar is counter-balanced by a debt obligation. Loans can result in growth in economic activity, but not growth in overall net private wealth. Ergo, ONLY a Sovereign Currency Issuer has the capability of creating private sector wealth (stock) and sufficient private sector dollars which constitute FLOW of Dollars in circulation. US Federal Government is a such a sovereign currency issuer. Nobody else creates US Dollars.. China does not have a Dollar-printing machine or govt agency. All the Dollars that China parks in the United States, in Treasury Securities, CAME FROM the United States in the first place. The Govt creates Dollars in a similar manner to how Banks create Credit Dollars. Congress & Treasury issue an order to the Fed to increase the balance of some recipients bank account. That funding doesn't "come from" anywhere, other than the Govt's legal lawful Constitutional powers to issue payments. (The process of spending between Treasury & Fed & private banks is convoluted and a bit opaque, and a bit too complicated to address here.) If you REALLY believe that the US Govt should have as minimal spending as possible --- minimal spending for the Pentagon or roads or any programs of any kind, minimal spending on corporate subsidies and support, minimal spending for "social welfare" of any kind for unemployed OR low-wage workers, no more federal allocations to States for local spending -- then at very least this IDEOLOGICAL ARGUMENT would want Big Deficit Spending brought on by radical tax cuts for the POOR and middle class. This could include drastic cuts to Social Security -- while keeping the Soc Security program. Funny -- but not too funny -- that conservatives have OPPOSED middle class and working class (same class, really) tax cuts which would let working people "keep more of their paychecks". Instead, they want to KEEP Payroll Taxes aka FICA -- which Reagan increased dramatically for no sound reasons --- but hand over the revenue to Wall Street. They already tested this in Chile after Allende was murdered in coup, and fascist General Pinochet took over. The result was that the privatized Social Security of Chile was wiped out, drained of assets, and Pinochet eventually had to prop it up with the "socialized" copper mines that had been appropriated from Anaconda by his predecessor. Capitalist economies NEED govt deficit spending for growth. Big Corporations 100- years ago understood this and lobbied for and received massive growth in Govt Spending and intervention, to boost profits ... and "create more jobs". This was during the Robber Baron era. Corporate profits were down, because consumer demand was insufficient to match expanded large scale industrial production. The economic problem of the First World shifted from one of scarcity of goods for the entirety of human existence to a crisis of abundance, of unsold surplus, of insufficient sales and profits. The old Capitalists, while greedy and unfair, were correct that the economy needed Govt Deficits. That was the REPUBLICAN-run "Progressive Era", with "progress" defined as Govt Intervention in managing and boosting and regulating and stimulating capitalism. The "New Deal" can be seen as merely a continuation of that GOP-run Progressive Era, such that more govt spending to boost Demand was handed off to American consumers, instead of ONLY giving "welfare" to deserving "already rich" people and their corporations. A Balanced Budget by definition --- even approaching a balanced budget such that the Govt spends LESS than what is DRAINED off by the combination of net corporate imports and net private unspent savings -- is a mathematically-guaranteed recipe for ongoing contraction in our money supply. This means that --- like in the Great Depression --- funds borrowed by industry and farmers at the beginning of a production cycle, were matched by lower retail prices later on, resulting in waves of bankruptcies, destruction of real wealth, and a handover of real assets --- farmland, production machinery, etc. --- to the creditors, who tried to sell that off at a loss to someone else. A balanced budget is a perfect mathematical recipe for a permanent recession and/or depression. Eliminating the so-called "national debt" would mean eliminating $17 Trillion in private savings aka financial wealth held by the private sector, currently in the form of Treasury Securities sold to banks and to investment firms and to private investors. The "national debt" is a SERVICE that the Govt provides to Rich People aka Savers in our Capitalist System. These are nothing more than special Accounts the Govt provides for people and corporations to store their wealth, esp when their savings exceeds limits of guarantees on private bank accounts, which stop at $150,000. This SERVICE is that banks use to drain down their surplus reserves they don't want to hold dormant. Does anyone seriously believe that Congress -- especially Conservatives -- are eager to wipe out the savings and interest earnings that go from the Govt to the top 10% or top 1% of Americans? Does anyone believe that the 1% would ALLOW this "national debt" -- their Treasury Security savings --- to be eliminated, that they would allow their own food supply of Interest Payments to be cut? Please. Be serious.