Budget Kenynesianism in hard times is a very good idea:  government spending really can keep money moving when liquidity is short and wages are down due to unemployment and the pressure it puts on the wages of the employed.

 As such, I think it incorrect of Obama to pledge to abide by pay-as-you-go rules, given that there is a limit to how much he can raise taxes even on the rich.  A larger middle-class tax cut, and direct aid to the levels below (as transfer payments or wages toward public works) will be needed.

 On the other hand, the war budget has so much excess in it, and defence is so bad at priming the pump, that maybe small cuts from the less popular parts of the War Department budget would be in order.