Government doesn't have a spending problem, the government doesn't have a spending problem...

All together now---the Government doesn't have a spending problem. 

The belief that we do, being propagated by the austerity now crew ignores the current reality we are facing in the markets and is hampering our long term recovery.  A rundown via Free Exchange over at The Economist Magazine :

Debtors are working hard to pay down their debts. In doing so, they transfer money to creditors. What are the creditors doing with it? To too great an extent, nothing, which is why interest rates are so low. But this means that the government can borrow cheaply and use the opportunity to make needed investments and support critical government consumption. Unfortunately, the government has done the opposite. State and local governments have cut back their budgets dramatically. The federal government's efforts to boost the economy through greater borrowing mostly offset these cutbacks, and the federal government is now following state and local governments down the austerity path. Insolvency needn't be a concern; if the government really felt the need to reassure bond markets, the best thing it could do would be to reduce the long-run path of spending on health care. Instead, it is focused on cutting short- and medium-term borrowing.