I recently read and heard some awful bunkum about the need to slash the Federal deficit. It did not come, as it usually does, from conservatives. It was, in fact, the proposed Federal budget President Barack Obama just presented calling for $1 trillion in deficit reductions over the next 10 years–largely, it appears, on the backs of the non-affluent.

Among the reductions he is seeking is $2.5 billion in cut in spending on a program that helps poor people heat their homes.

Due the bad economy, about 8.3 million households used this assistance in fiscal 2010, up from 5.8 million in fiscal 2008, according to the National Energy Assistance Directors Association. But Obama’s budget would commit half the amount set aside for this program in 2009. That’s not what one wants to hear after the brutal winter most Americans have been experiencing. Perhaps Obama is thinking is that since poor people are used to suffering, what difference does it make if they freeze a little more next year?

Among other awful proposals, the budget calls for cuts to assistance to students pursuing graduate studies, reductions in help to states for environmental programs such as water treatment projects and reductions to community organizing assistance. That last one is especially ironic in view of the fact that Obama’s role as a community organizer helped start his political career.

All this comes mere months after Obama and Congress approved extending tax cuts for the wealthiest Americans, which alone increased the deficit by more than $500 billion.

Call me insane, but I do not share the widespread terror of deficits. Apparently, many politicians on the right don’t, either, as their unhesitating push for unwarranted tax breaks for their wealthiest constituents shows.

The Republicans have their own budget proposals. Sen. Rand Paul (Ky.) has recommended spending cuts of $500 billion for FY 2011, while Rep. Michele Bachmann (Minn.) would slash more than $400 billion.

They could find very little to cut out of defense spending, by the way. And reduce subsidies to Big Oil? Fahgettaboudit!

Yes, the expected Federal deficit will reach $1.6 trillion this year, according to the Wall Street Journal, and yes, that is a record for us, although not if inflation is taken into account. It is a far less alarming figure when we bear in mind that it amounts to 59% of our gross domestic product (GDP). This is well below that of such reasonably prosperous nations as the U.K. (public debt at 76.5% of GDP), Germany (74.8%), Austria (68.6%), and the Netherlands (64.6%), according to data compiled by the Central Intelligence Agency.

Take a look back to World War II, when the economy was fairly thriving, and you can see that the Federal debt has been higher–actually at one point in the mid-1940s, over 100% of GDP, although admittedly that was a time when we were struggling to overcome powerful enemies.

The point is, if put into the context of the American economy historically, it’s not such a scary deficit. Rather than worry about it, we need to invest our real concerns in the economy.

Many believe the economy is in abysmal shape because government is too big. If that’s the case, then cutting federal spending seems reasonable. If anything, however, that would make matters worse.

A failure to increase government spending significantly during the early years of the Great Depression aggravated the economy’s problems. It was not until the big spending of the New Deal that we started to come out of it.

Obama’s budget targets the wrong problem. The right problem is unemployment and too many low-wage jobs. We need projects to develop well-paying work–for instance, by investment in infrastructure, education, and health care.

Right now, American companies are sitting on almost $2 trillion of cash, a 55-year high. Rather than hiring people, which would do us all a great deal of good, large corporations are looking to make themselves bigger through mergers and acquisitions. That will fatten executive compensation but do nothing for the nation as a whole. If anything, M&A reduces jobs.

Since we cannot expect much help from big business, that brings us back to spending on government programs to create jobs and put spending money into people’s pockets so they can buy important items like food, clothing and yes, insurance.

The tax code could also be amended to cut taxes on those earning, say, $60,000 or less, and even eliminate them entirely for those earning under $20,000. Offset that with higher taxes on those earning $250,000 and up. The wealthy can afford it.

We have been hearing the same old arguments about deficit reductions for years, even when the economy was booming.

What we need is a budget that is less mindful of Wall Street and more attentive to working and middle class people. The Affordable Care Act was a good start. Now let us move further to reducing the growing inequality of incomes that we have seen since the early 1980s.