You simplify the issue, and admit so in this post. It's anything but simple.
I don't understand why programs to fix schools and infrastructure is a bad thing. You dismiss jobs from the equation entirely just because it's not the only problem, which does not make sense. It is not the only problem, but it is part of the problem.
This is a multi-faceted issue that requires a multi-faceted approach. Job creation through government work programs that improve our public facilities is not an inherently bad idea, if executed properly. It can help, if done right.
Actually that post you used is talking about the fact that we already have social programs but everyone wants to increase them more. These programs for unemployment insurance, welfare and the food bank were supposed to wipe out poverty a couple of decades ago but didn't because people's choices are still important. I'm not against the government feeding people when they are out of food but it's a band aid. Even if done right as you say we still need the majority of the economy to revive and more taxes in the direction of make work programs leaves less wiggle room for average savers. If a school is in bad shape we should do something about that but No child left behind, and healthcare entitlements ate up much of the tax revenue and into a deficit. Can the U.S. continue to add to the debt? Obama would have to do more than quickly end the war to solve that problem. He will have to go into more deficit or increase taxes. I prefer cuts to social spending because there's always fat to be found there.
The government wants to do more than basic services and increase in size. In Canada we have more social programs and we still have people demanding poverty to disappear. I thought the 40% of the GDP in the hands of the government was doing that. I guess not. So the next question is how much is enough government? Taxes can only go so high before no one has the incentive to work. There has to be people paying for Obama's programs and not using them for the program to exist unless we let the printing presses go into overdrive but that would be a disaster. I don't think Obama is that far left to do that.
I mean if you get 10,000 from the government and I get 10,000 but you pay off some of your debt and I snort cocaine the social program is only as good as the person who uses it. That's why poverty is never erradicated. Yet social workers keep talking about those same solutions like it's a panacea in our country. The auto workers are getting a bailout in Canada and social workers started staging press conferences to mention "If auto companies get tax payer dollars why can't we get money for eliminating child poverty?" It's a moral hazard. Companies and lobbyists are lining up. There has to be a line drawn.
What Obama is doing is targeted (hopefully) and the main economy will still have to go through the natural recession to realign workers to the right areas. In the mean time if the majority of the people increase their savings they will naturally have more of a spending confidence because their spending is reasonable to their take home pay. A recession is simply a movement of workers from unproductive businesses that existed because of cheap debt to productive businesses that do better. The time lag inbetween is a shot of unemployment.
It totally sucks but why keep interest rates so low for so long over the Clinton and Bush Administrations? It's because any small recession is a political hot potato (especially during an election) and each administration likes to lower interest rates during elections to pass the buck onto another administration. That's why all administrations like to tackle a recession in the first two years of their term, because the last 2 are for gearing up for the election.
At some point consumer debt is so high and their wages can't keep up to the payments and consumers can't spend anymore so all those companies that were producing as if the consumer can go forever have a whole bunch of extra inventory. Eg. American Cars, and houses where people bought them to flip and not to live in them. Now there's a surplus of cheaper housing, especially in the U.S. If the interest rates were a bit higher during the last boom a lot of speculators couldn't get enough money to blow on oil futures and houses for flipping. Most economists say that 4% interest most of the time is not too damaging to the economy or too inflationary. I'm sure there's some debate on the right interest rate but it's probably not too far from that.
I believe the middle class is shrinking because of the lack of savings this past generation. It's hard to be middle class when you lose your job which in turn can lead you to losing your house and car. You get bad credit so when you need to have some credit you are forced to use cash only. Debt as tool has been abused by government, individuals, and corporations.
I want Obama to talk about fiscal responsibility of the individual but that would be counter to the Krugman attitude that consumer savings is a problem so he talks about projects. By saying less he can stay popular and when the recession is over he can claim that the projects he did are the reason for the recovery just like they do with FDR and the Great Depression.