saving and aggregate demand

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

Just a few minutes, while listening to US National Public Radio in the
shower, I heard Ev Ehrlich, an economist who's former undersecretary (or
assistant secretary) of Commerce in the Clinton administration, and also a
former (or current?) member of the Union for Radical Political Economics
and guitarist, vocalist, and pianist of the now-defunct radical economics
rock 'n' roll band, Red Shadow. He presented an articulate and reasonable
presentation of the US problem of people & corporations not saving, so that
foreign funds were needed to take up the slack, with the downside of
causing rising US external indebtedness. (Reasonable, to the extent that
falling water wasn't interfering with my hearing.) But then he said that it
was a good idea for the US government to "pay down the debt."

query: where did economists get the habit of ignoring the way in which
"paying down the government debt" reduces aggregate demand, along with the
phenomenon of fiscal drag? is it due to the "new classical" school's
introduction of the assumption that GDP is always at (or near to) the
full-employment level? is it due to the Krugman-initiated cult of
Greenspan, in which it is assumed that the Fed can fine-tune the economy to
target any level of GDP it wants? Was Ehrlich simply parroting the Clinton
Party Line? what is the logic behind the idea of ignoring the aggregate
demand effects of government surpluses?

Don't people realize that the government's debt is the public's asset
(where most of the public is inside the US)?

On a stylistic note, why isn't it "paying _off_ the government debt"? did
Clinton coin the phrase "paying down" and did the phrase spread like wildfire?
Jim Devine jdevine@xxxxxxx & http://bellarmine.lmu.edu/~JDevine
"From the east side of Chicago/ to the down side of L.A.
There's no place that he gods/ We don't bow down to him and pray.
Yeah we follow him to the slaughter / We go through the fire and ash.
Cause he's the doll inside our dollars / Our Lord and Savior Jesus Cash
(chorus): Ah we blow him up -- inflated / and we let him down -- depressed
We play with him forever -- he's our doll / and we love him best."
-- Terry Allen.