How I Stopped Worrying And Learned To Love The Deficit (with apologies to Stanley Kubrick)

Obviously running large deficits indefinitely can cause problems, but some people can't get beyond DOD, deficit obsession disorder. This Holman Jenkins article has a good treatment of the political issue. Here are some excerpts:

Politically, voters care about budget deficits only when they feel insecure about their own jobs. The deficit then becomes an emblem of economic mismanagement (never mind the Keynesian wisdom that a growing deficit is desirable when the economy is slack, providing countercyclical demand).

What Republicans have understood, instead, is that the only effective long-term form of fiscal discipline is tax cuts.

Republicans have become the Party of Tax Cuts: that is, the party that lets you keep your own money, the party that protects the private sector from being smothered by big government. In a more sophisticated audience's eyes, it means a second thing: the party that restrains the growth of government by keeping it on the only fiscal leash that works--a k a the deficit, which maintains a constant tension between forgoing new spending or borrowing to pay for it.

Admittedly, this involves Republicans in a certain amount of self-duplicity (We don't mean this in a bad way; every party has to keep its big tent together.) Not only do Republicans take as given that Congress will spend every dime it can tax and then every dime it can borrow, until it runs up against its effective credit limit. Republicans also accept that they will behave exactly like Democrats in this matter.

Gary Becker, the Nobel economist, has made the same argument much more elegantly, showing that the strongest correlate to fiscal restraint is a rising share of the federal budget devoted to interest payments on the national debt. The picture here is not pretty if you imagine your federal government being run by farseeing grownups who plan the future meticulously and have compendious knowledge of all things.

The picture is quite pretty if you have limited confidence in managerial competence but appreciate the exquisite wisdom of the Founding Fathers, who devised a government responsive to the public mood yet constrained by checks and balances.