> What's so wonderful about chronic deficit spending, really?
Think of it by analogy with an individual. If you are about to retire, your income is going to be low, and you don't want to leave debt to your children, then you have to adjust your spending, rather than borrow. If you are young and about to graduate from college and need money to rent suit and tie to go to a job interview, it'd be silly not to borrow. Future income should allow you to repay the debt (unless the prevailing interest rate is too high).
Now if you are the U.S., and you are *not* thinking of shutting down the country and liquidating its assets, then you are like a young person who will never stop being young. (Somewhat, because demographics matter.) Now, on top of that, the size of the national treasury is increasing. So, for as long as the eyes can see, you'll have some time horizon ahead of you. You can roll over some debt and borrow from one another or from the rest of the world.
How much exactly? Well, it depends on how much debt can be sustained without people getting anxious and the economy swinging up and down too much as a result. There's a limit (in macroeconomics, this limit is called "no-Ponzi"), but the limit is not rigid. Some deficit spending is not a big deal. It all depends on the size of the deficit. That said, given the history of capitalist crises, if I were deciding on fiscal policy I'd pick a low deficit (say, as a percentage of GDP) rather than a high one. A perfectly balanced budget fiscal policy is a silly dogma.
I agree with your suggestion that taxes for the rich should be higher.
Depending on political forces, we may want both, higher taxes for the rich and reasonable, responsible deficit spending. However, politically, deficit spending may be easier as a means to redistribute income in favor of the working people. I guess it depends.