How many threads have there been on this site where liberals proclaim that deficits don't matter...
sigh
No, it was actually Cheney who insisted that "deficits don't matter," when Bush 43-era policies erased the Clinton-era surplus.
The typical Keynesian claim is: During a recession, it is more important to spend on stimulus with high multipliers (like infrastructure spending, or unemployment benefits) to kick-start the economy, than to worry about short-term deficits. The stimulus will get the economy back on track faster, which means you're limiting the amount of government revenues lost to the recession. In turn, the deficit will go down as the economy gets back on track.
In addition, a fair amount of the government spending cuts would harm the economy. Cutting military will have some negative effects; but firing teachers and cops, or allowing infrastructure to continue to deteriorate, or putting off needed bridges, will all hurt the economy.
So: In 2008 and 2009, it would have been a great idea to spend on infrastructure projects, rather than do tax cuts.
1) We need to fix up bridges and roads anyway.
2) That kind of work would rely heavily on the underutilized construction workers and resources, idled by the recession / real estate bubble burst.
3) In the long run, you'll make up more by getting the economy back on track sooner, than you would if you tried to cut spending during the recession.
Further, the right-leaning economists claimed that a debt-to-GDP ratio above 100% would harm an economy. It turns out this is not the case, as the paper in question used a flawed interpretation of the data. (
Reinhart-Rogoff Economic Paper Draws Fire - WSJ)
Despite the conservative caricature that the left just wants to tax and spend, the results we're seeing now are entirely consistent with what leftists and Keynesian-influenced economists have been saying for years.