Damm the deficit, full speed ahead!

From: http://mrzine.monthlyreview.org/2010/galbraith160710.html
Excerpts:

There Is No Economic Justification for Deficit Reduction

With high unemployment, high public deficits are inevitable. The only choice is between an active deficit, incurred by putting people to work or otherwise serving national needs -- such as providing a decent retirement and health care to the aged -- and a passive deficit, incurred because at high unemployment tax revenues necessarily fail to cover public spending. Cutting public spending or raising taxes, now or in the future, by any amount, cannot reduce a deficit due to high unemployment.
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The only way to reduce a deficit caused by unemployment is to reduce unemployment.
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One more time: without private credit, deficit reduction plans through fiscal austerity, now or in the future, will fail. They cannot succeed. If at the time the cuts take effect the economy is still relying on public expenditure to fund economic activity, then reducing expenditure (or increasing taxes) will simply reduce GDP and the deficits will not go away.

Further, if the finances of the private sector could be fixed, then an austerity program would be entirely unnecessary to reduce public debt.
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Entitlement cuts, no matter how severe, cannot and will not achieve deficit reduction.
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the mandate to reduce the primary deficit to zero by 2015 is unnecessary.
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Insolvency, bankruptcy, or even higher real interest rates are not among the actual risks to this system. The actual risks in this system are (to a minor degree) inflation, and to a larger degree, depreciation of the dollar. However at the moment there is wide agreement that a lower dollar would be a good thing -- against the Chinese RMB and now also the euro. So it is difficult to believe that the goal of deficit reduction per se serves any coherent, or presently desirable, economic objective.

We can conclude that there is actually no economic justification for the target of reducing the primary deficit to zero by 2015 or any other date.

Comment: I don't follow his logic but I do understand his conclusion. Deficits are good! Higher deficits are better! Spend, spend, spend, spend!