Last Saturday, the Democratic presidential primary candidates (minus Biden) met in Chicago for a forum organized by Yearly Kos, a left/liberal blogger convention. I was happy to see Gov. Bill Richardson loudly booed and hissed when he identified deficit reduction as a top economic priority and called for a balanced budget amendment.
There are many instances when it is desirable to run deficits. After WWII, Uncle Sam made major social investments and took his sweet time in paying down war debts. Fiscal austerity at that time would have been disastrous and would have prevented the substantial improvement in American standards of living of the post-war era. Deficit-spending is also an important government tool in times of recession and depression. These days, although the deficit seems huge, in historic terms it's actually a pretty manageable (reasonably small) percentage of total U.S. GDP, a point John Edwards made in the forum.
The Minneapolis bridge collapse, the destruction of New Orleans and the shitty Eisenhower-era roads and bridges we see everywhere in this country should be a wake-up call. It's time for a massive public works program, not decifit reduction. Of course, we're not living in the '50s anymore - this time around, the emphasis should not be on the automobile but rather on energy efficient mass transit between urban, suburban and "exurban" population centers.