I used to think this way too but not anymore.
Clinton did not really balance the budget. He just significantly decreased the rate of borrowing. That happened to combine with the computer, internet, and telecom booms, and so, things looked more peachy. But, the dirty secret is that to accomplish that, he also neglected the military, perhaps criminally.
In the current environment, with the WOT going on, it is very difficult not to have a big military budget. Things add up while cutting corners may put politicians on the chopping block. In addition, the economy was not as strong after the 2000 collapse, so revenues were down. Even now, people are talking about "jobless recovery" and "inflated volume by speculative trading", while major manufacturers are shutting down plants. So, while I do not agree that "deficits do not matter", I also see significant differences in the two political and economic situations.
"Deficits do not matter" is not true for the common American, but if you think about it, you will see that it is true from the government's perspective. If you and I borrow money from the bank, we had better pay interest and had better return the principal eventually. We cannot generate inflation to devalue our debt. USG on the other hand CAN. It is so big a borrower that by borrowing and spending, they can and do devalue the dollar, thereby shrinking the debt in real terms. The government does not care about inflation nearly as much as anybody else, because most of its assets are physical while its income are taxes that automatically readjust regardless of inflation. So, yes, they do not care about deficits.
The people that should care about deficits, debt, and inflation are the commoners, because for most of them, their assets are in their one house and in savings accounts. The savings accounts will be devalued by inflation unless interest rates go up significantly, while the house value might be saved by real estate growth but the one house is not really liquid because they have to live someplace. Furthermore, the commoner has to worry about tax increases levied from him to "remedy the situation", while the prols and the aristocrats pay no taxes. Finally, the commoner must worry about depression and losing one's job or business.
It's good to be USG.
Realistically, the "fiscal conservative" Dems cannot change the above unless WOT is somehow won quickly. In and of themselves, pulling out of Iraq and Afghanistan are not "victories", especially if followed by terrorist/fundamentalist takeovers. THAT would be delaying the inevitable. In addition, the Dems have no meaningful plans, and if you observe them carefully, you will see that most are stuck in the 1990s while some are stuck in the 1960s and 1970s. Most of them believe that somehow the world can be made turn back into the "golden era of Clintonianism", but they tacitly ignore all of the above. Finally, most of them simply do not have the stomach to fight the terrorists by effective means and thus cannot produce a meaningful wartime policy.
