Ok, so Obama's budget will probably pass. I am going to guess around 3.5 trillion.

That's 1.75 trillion more then the government will bring it. Or, $5,800 per american citizen.

Where do you think this money will come from, and how do you think we can pay for these kinds of services in the long run?

By raising taxes and cutting spending. Even before Obama was around, the debt was too large to do otherwise.

The main problem is that people lack the political will (from both parties) to actually cut spending and actually raise taxes. Too many people complain. A true fiscal conservative will use all options on the table, as decreasing the national debt should be priority #1, not cutting taxes.

I agree we will probably raise taxes, most likely indirectly though inflation, but you also think Washington will cut expenses? If so, where?

(I didn't say how you would do it, I said how do you think DC will do it). :)

If you follow the Keynsian model, it works. When times are bad, you spend a little more to pick up the slack and help things get back on track. When times are good, you cut back on spending and raise taxes because raising taxes actually helps the market at the end of the day. And that means cutting expenses EVERYWHERE, even if it is politically unpopular. The problems is that both parties have their sacred cows in the budget that neither one is willing to give up.

Furthermore, it can be just as risky risk when the market is doing TOO WELL as it usually leads to a bubble and a subsequently collapse. So the government takes money out of the system by raising taxes and decreasing the money supply to prevent too much liquidity. And it can pay down the national debt in the process.

Minimizing the peaks and troughs of the business cycle creates less problems for the market and at the end of the day allows you to take in more tax revenue. I hear people talk about being fiscally conservative, but the next thing that comes out of their mouth is that they want to cut taxes. I hate to break it to you, but you are never going to pay down the debt by cutting government spending alone. Its over $10 trillion.

In comparison to a more monetarist viewpoint, I think it works well if people follow it, but the problem is people never follow it.  And it isn't very useful when you run into problems too big for simply increasing or decreasing the money supply to solve.  There are certain situations where if the government didn't step in, it would just be too catastrophic. The recent collapse of the financial market was a great example. The government should avoid getting involved in the market whenever possible. But if you honestly think in this day and age with a global market and multi-trillion dollar financial institutions that the same laissez-faire economics that people dreamt up hundreds of years ago during times when it took three months just to sail across the ocean will work perfectly, I think you are fooling yourself.

At the end of the day, the market is pretty stupid. People like to talk about how smart it is, but it can just as often be stupid and irrational. The government has a vested interest in how the market does. The government is also the largest sole contributor to GDP in just about every country in the world. The government IS part of the market. And it is also the only entity with the resources to deal with problems that the market can't. Why should the government just sit back and do nothing?

I vote that we begin selling cup'o'kittens in foreign markets.

Nice speech. What does it have to do with collecting funds? This is a debate about paying our bills, not about why we spent the money.

All I got out of that is we should cut spending, but we wont, and we should raise taxes.

A funny little story:
I used to work for the Air Force Operational Test and Evaluation Center. What this department did, was look at new technology, and see how well it improved our ability to fight a war.

So for example, let's say a battle lab came out with a cool PDA GPS thing that could be given to every man on the ground, and it relayed potion information, gave them mission updates, allowed them to communicate back to headquarters, and 100 other things. It's the coolest thing anyone has ever seen.

If we then do a war gaming effort, and everyone turns it off and puts it in there backpack, the device is useless.

How something is going to play out in real life, due to human nature is as important as the concept itself.

The same applies here. In one breath you say Keynsian can work, and in the next you say no politician will follow it. If it won't be followed, it's useless.

The only way this debt can be payed, is to print money, and inflate our way out of it. No significant program will be cut, because no politician will cut it.

So are we in agreement that everyone in the country will have to contribute more to the system to pay for the new services?

By that logic, no economic philosophy would work.

Depends on your definition of “work”.

If you mean “work” as in socialism, then you are right. The reason none ever have, is because none ever can.

If you mean “work” as in allow the people who earn it to spend it, that works rather well. It just seems “unfair” to some.

Attempting to make the world fair, never works. If your premise is an economic system include farness in it before it can be defined as “working”, then you are correct. No economic philosophy would work.

So I guess the government should stop providing police and military protection. That is socialism that isn't "fair" to some people who benefit more from it than others.

It was inevitable far before Obama got in let's face it. The only way I can see it working is by raising taxes, or coming up with a better stepped tax system.

I have faith Obama will handle the financial situation well though.