Budget cuts? You've gotta be kidding: http://www2.ed.gov/about/overview/fed/10facts/edlite-chart.html Per pupil spending has skyrocketed in the last 40 years.

Treasuries are guaranteed and bank accounts are not - unless you mean the FDIC insurance which taxpayers provide for anyway. So no, investors would rather buy government bonds than keep it in banks since risk is lower and return is (supposedly) higher. And foreign investment is still part of the economy - government borrowing will crowd out the private investment. I never claimed government spending was good or bad. I claimed it's inefficient and ineffective as economic stimulus.

Where are they going to get the money they are handing out in the first place:

A. people who have saved and can buy treasury instruments thus crowding out private investment.

B. taxes on the people who would invest in businesses that buy things and employ people

C. monetizing the cost and inflating prices across the board

D. All of the above

Really? How come only 18 percent of Japanese polled believe the 2 trillion yen plan by the Aso government will work? A full 71 percent don't think it will do anything to stimulate the economy. http://www.japaninc.com/jin495_economic_stimulus_package

Government spending does not stimulate the economy. It takes money FROM the economy and redistributes it to politically favored and connected groups. Bastiat recognized this 160 years ago. Keynesian economic stimulation has never worked before, during, or since Keynes lived. http://www.econlib.org/library/Bastiat/basEss1.html