"Budget cutting in a depression just deepens the depression...."

http://www.commondreams.org/view/2012/11/08-3

Hey, Obama, Hands Off Their Medicare
Striking a deal with Republicans to cut entitlements would be a disastrous start to the president's second term.
by Robert Kuttner

....
President Obama and House Speaker John Boehner are on track to cut a deal that Wall Street has been slavering over for a decade—a small dollop of revenue increases, mainly through loophole closings, coupled with massive spending cuts including in Social Security in Medicare, adding up to 4 to 5 trillion dollars of budget cuts over a decade....If Obama and the Republicans do make such a deal, growth will slow to a trickle.

Ironically, the president, having humiliated the Republicans on Election Day, holds most of the cards.

He can declare that he has no intention of cutting Social Security or Medicare and instead propose new must-pass infrastructure legislation. And he can insist that any budget deal needs to include higher taxes on the rich. (California Governor Jerry Brown just demonstrated that such a stance is good politics. The initiative that he sponsored and worked for, raising taxes on the rich to increase funding for California’s public schools, was approved by the voters.)

....Re-elected presidents often face a jinx in their second terms. The worst possible start for President Obama would be to agree to a deal that harms the economy and sells out the people who just re-elected him.