If spending had tracked what happened under Bush II, discretionary spending would be about a third — or more than 2 percent of GDP — higher. Since there is good reason to believe that the multiplier is 1.5 or more, this would mean real GDP 3-plus percent higher, closing much if not most of the output gap, and probably an unemployment rate below 5.5 percent. In short, we would have had a vastly healthier economy but for the de facto victory of disastrous austerity policies.
As Atrios often says, nobody cares about the deficit. Nobody. The deficit scolds never, ever suggest higher taxes on high incomes or wealth under any circumstance.