The bankers blew up the world. This made a lot of home equity disappear. That meant people had less money. This meant they stopped buying stuff. That threw folks out of work. This means they are paying less in taxes and that the government is spending more on support programs.
In response, the government spent money to bail the bankers out, spent some money to reduce the pace of job losses, and cut everyone's taxes.
The fact that people were out of work, weren't buying stuff, and needed help increased the government's spending and revenue. The tax cuts reduced the revenue some more. This means the deficit is high.
How high is the deficit? Not as high as it was a couple decades ago. (See Reagan and his aftermath.) The fact that people aren't buying things has also reduced the cost of financing the deficit to very low levels. As deficits go, this one is relatively cheap.
So is the government putting people back to work or giving them money to buy stuff? No.
Although the deficit isn't a huge problem right now, both parties feel compelled to immediately address address it.
Why are they all fixated on the deficit? The Republicans say the deficit is a critical emergency because they are nuts and hate all Democratic presidents. In fact, it is so critical, according to Republicans, that they are willing to blow up the world again. Why are the Democrats are hysterical about the deficit? The answer remains a mystery. None of the possible answers reflect well on the Democrats.
How have they set out to solve the deficit crisis that isn't a crisis? Neither party will raise taxes on the only people with money. The Republicans hate all government, and the Democrats don't appear too crazy about it either, except our bloated military which both parties love. So the Democrats and Republicans agree that cutting government spending immediately is absolutely critical.
Since they won't cut the military budget significantly, among the spending cuts are cuts to social security (which is in generally good shape for a couple decades and which regular folks and the poor depend upon) and cuts to medical services to the old and the poor.
These cuts won't put anyone back to work or give anyone more money to spend. They will increase and spread the suffering of regular folks and the poor.
Moreover, they may actually end up doing little to reduce the deficit because they don't fix any of the problems that we currently have. They won't put anyone back to work and they will reduce the money people have to buy stuff.
Do I have that about right?