I've been infuriated by the Republican orchestrated push for austerity during the worst possible time for such measures (slow economic recovery from a deep recession). We should be spending more right now, not cutting the budget. The backslide of 1937, etc, etc...
But Matt Yglesias added some much needed perspective to the conflict and especially the political repercussions should spending cuts hurt the recovery:
It’s generally wise to assume that the White House isn’t blind to that obvious potential political problem. Part of what they’re thinking is that a 2011 agreement to long-term spending cuts is the best way to avoid the need to reduce spending during the election season. How’s that? Well, it’s because the fiscal consolidation plans being discussed are for trillions of dollars worth of cuts over a 10-year horizon. Since you’ve got that horizon, it’s not strictly necessary for any of them to come between September 2011 and November 2012. On the contrary, in principle spending could go up in the short-term consistent with any long-term cuts.
Others have floated this theory recently based on the president's recent remarks on the debt ceiling. This past week, the president said that it might be easier to achieve large spending initiatives if the deficit situation is "in order." I think this is wise, though I'm cautious about whether or not it can work. We've all been seriously burned by Reaganomics and the impact of the recession. I'm not entirely confident that the timing of this plan will work.