All of these people argue that a nation is different than an individual or a corporation about debt because they can tax. I see no real difference. Debt is avoided in extremes because it increases risk in the real world. If you have a company with the same income & operating cost you can juice returns by borrowing but you also juice losses. When Krugman or Tyson advocate supporting stimulus with debt at high levels they are making a bet that nothing else will go wrong. If you are fully loaded with debt & then a black swan event happens, you find that there are no resources to respond & all of the options (including draconian tax increase) are horrible.
I always hear that the profitable north needs to accept higher inflation. What they are really saying is that Germany must get less competitive so they should pay their employees more for less work & put more restrictions to artificially drive up cost. Stupid is as stupid does.
The report is absolutely true the budget rate did decline in Obama's term. That also hides the true issue. In the late 90' we spent about slightly more than $7,000 per capita in 2005 dollars. That climbed to above $9,000 in 2008. In 2009, it jumped to almost $11,000 & then slowly declined to just above $10,000. We are spending less since the beginning of Obama's term but we are also spending 40% more in real terms per capita since Clinton. Such excess spending was bad under Bush & more is even worse under Obama.
People don't seem to understand that a "stimulus" is designed to go away relatively quickly otherwise it is not a "stimulus" just a increase in base spending.
Reduce the deficits prematurely? When would it be better? The deficit is large because of a stimulus. Whether you agree that it has helped or not, the spending has happened & it is time to go back to pre-stimulus levels. Let's face it. We shot our wad & now everything is out of balance. We are addicted to the drug of loose money & fiscal spending & we no longer get that high. Because we are so out of balance, every situation is a crisis. Now is the time for us to face the truth that we have hit the limits of what we can do, take the pain, & cut back to what the economy can afford so it has the ability to face the next situation without it becoming a "crisis".
The world is paralyzed because there are no easy answers any more. There has been 20 years of unbalance trade, growth, government debt, and monetary policies. Because of bubbles & debt most of the old tools that governments have used in the past have been used & they are now in unstable positions but tasked to do more. It is hard for the debt ridden to spend more, for the austere to grow, or for the world to all be net exporters to grow their own economies. We are not trying to get a solid growth base with out doing too much collateral damage, but it still means that many will get hurt in the process.