Joe Weisenthal asks the question (boldface mine):
What good are balanced budgets? That’s a question that doesn’t get asked enough. People of various political ideologies often accept as a fact that, ceteris paribus, a balanced budget is better than a budget in deficit. But why? Very rarely do people actually show the math and explain what the real-world benefit of this is… the last time the U.S. ran a budget surplus was in the late 1990s. That was swiftly followed by a stock market crash, a recession, a housing bubble, and then the mother of all financial crises in 2008. So when you look at that surplus, you have to wonder: What tangible, standard-of-life improvement did it confer on the American people? Because real world benefits are what economics is all about. If you can’t point to any, or even theorize what they might be, then saying something is “good” is meaningless rhetoric. Now of course for a household, you probably want to run a surplus, so that in the bad times, you can spend your savings and smooth out your consumption. But of course, persistent government deficits haven’t been an impediment to either more spending or tax cuts from the U.S. government, so that doesn’t seem to apply. So seriously–and this is not trolling or a provocation–what is it about balanced budgets that people think materially benefits the welfare of the nation?
Answer: there is none. Deficit spending and reduction are tools, nothing more, for controlling inflation and for allocating resources (through spending and taxation).
And that last sentence terrifies many conservatives and neo-liberals. Like conservatives who are agnostic, but believe it’s important that the hoi polloi believe in God (otherwise they/we would run riot), the story of deficit spending has political uses (“We can’t afford to do X”), even if it is utterly unfounded in reality.