" The tax rates go up because there's not enough revenue to support spending. "
This is the basic liberal mindset when it comes to fiscal policy. Spend as much money as you can get away with and then try to find ways to pay for it, mostly by raising taxes. Revenue chases expenditures, instead of the other way around. When I was growing up the message of living within your means and not going into debt was drilled into me by my parents, grandparents, and every other adult. The priority was to limit spending to your income, and you don't increase spending until you've already increased income. And BTW you're also supposed to be saving something for a rainy day too. That's called fiscal responsibility.
That's not to say you don't take out a loan to buy a house or a car, there are some things for which debt is actually a good idea, particularly if it's going to reap dividends down the road. And perhaps that's where my mindset differs from the basic liberal POV. They think everything reaps dividends down the road; unfortunately most of the "investments" democrats and some republicans make with taxpayer money don't turn out to be all that positive. We don't get enough bang for the buck, like all the "investments" in alternative energy companies and high speed rail that have no chance to be financially viable for quite some time.
A liberal doesn't consider the idea that maybe less gov't spending is actually a good idea in the long run. There are many examples of countries that have done so and managed to get their economies moving and reduce their debt. Canada in the mid 90s comes to mind. There are no examples of any country spending itself out of a hole, and borrowing gobs of money in the process.
I guess you missed the point. "Not enough revenues" can also refer to the loss of the tax stream, and not on spending at all. If the GDP rises, it's safe to say that businesses are doing significantly better which (in the fixed 35% business rate we have had for a few years now) ought to mean MORE revenue. If employment is down, the tax stream suffers. Likewise, if major companies like Exxon Mobil (who had earnings of $73 bn in 2011) get to pay 2% ($1.5 bn as opposed to the $31bn @35%) that shortfall has to be made up somewhere. Bush 41 realized that, and became a 1 term Republican for increasing revenues rather than applying pressure to corporations (the Reagan legacy, I presume) - so this isn't a "liberal only" approach.
You're making a huge mistake trying to equate household finances with the national economy - a lot of people do it, but it makes no sense at all. Your household, for instance, doesn't set the budget terms for 10 years down the road. It doesn't have to account for the unexpected (you might, granted, but only if you're lucky enough not to be living paycheck to paycheck as an awful lot of us do). And - this is most important - you can't live off the bank as our economic system mandates that the government must.
1797, after the Revolutionary war, the US went into a recession and was on the verge of defaulting on European loans that got us through the war. The US government began subsidizing corporations in order to capitalize on the industrial boom that was beginning. That spending pulled us out of a recession and stopped the default.
In the 1930's we suffered through the Great Depression, and although Lord Keynes was only just coming to the forefront as the top economist of the time, FDR used massive amounts of federal spending to get people back to work and end the depression. WWII helped as well, since the government - at the height of private prosperity - capped the economy by instituting rationing, which forced savings and investments until 1947 - and that began 30 years of solid prosperity. So, you really don't have to look too far to see at least one country save it's ass tomorrow by spending like crazy today.
