Do budget deficits matter? In one sense the answer is unequivocally yes. Experts agree that when the federal government spends more than it takes in for a sustained period and borrows to make up the difference, the result is severe economic consequences.

Hyperinflation, currency devaluation, and default are the haunting ghosts of fiscal imbalance.  Just ask Greece.

Yet, in the shorter term, the political waters surrounding the issue are a little murkier. Indeed, an important debate about the politics of debt is now unfolding in Washington.

Republicans hope to capitalize on the issue, arguing the Obama administration and the Democrats in Congress facilitated a debt crisis in the last two years.  They will contend the level of red ink is now so deep it will drown future generations and choke off the next generation’s dreams of prosperity.

Democrats will dispute these claims, arguing voters don’t care about deficits in the abstract, as long as policymakers can pay down some debt and manage its size before we plunge off the fiscal cliff.

Moreover, both sides know the medicine required to reduce the debt also includes some serious side effects. Cutting spending on the big cost drivers – Medicare, Social Security, and Veterans' benefits – is tough political sledding.  Too strong a dose of austerity might kill the doctor administering the treatment. 

In other words, once voters face the inevitable trade offs associated with cutting the budget, the wings of the deficit hawks get clipped.

Ruy Teixeira, a senior fellow at the Center for American Progress, weighed in on this debate this week, writing: “Conservatives argue that the public is in full deficit reduction mode and there’s nothing more important to them than cutting government spending.  The grain of truth here is that the public is in fact concerned about the size of the deficit. But everything else is wrong. There are many more important things to the public than cutting the deficit.”

Teixeira backs up his point with a June 2010 Gallup poll, showing the public supports (60 percent support/38 percent oppose) additional spending to “create jobs and stimulate the economy,” and a  June 2010 Pew survey indicating a majority of Americans say they oppose cutting public safety, transportation, and education programs to balance state budgets.

One might argue whether these questions, posed in the abstract, really support Teixeira’s conclusion. He says that when they suggest voting against more spending in the name of deficit reduction that it “is really not doing the public’s bidding.”  I will grant him this: Polls can and do show the public is cross-pressured on these spending issues.

Ezra Klein wrote a piece in the Washington Post this week hoping to embolden big spenders with another set of data. Citing a host of well-respected political scientists, Klein argues that there is no historical correlation between deficit spending and electoral outcomes.

George Washington University’s John Sides, a prominent political scientist agrees. Writing at the blog, The Monkey Cage, Sides concludes, “…the president and his party are not punished for running up the debt. They are punished for a weak economy.”

It’s hard to argue with that conclusion about the economy, particularly based on the historical data. Yet I wonder if only looking backwards masks some important recent changes in the political consequences of the deficit.

I agree with Sides that when it comes to political implications, perceptions about the economy matter a lot.  But I also believe the historic levels of debt – and the attention the issue has received in the media this year and from the Tea Party movement -- might factor into people’s political thinking more this year than in past cycles.

A Democratic pollster told a group recently that he sees more of a connection between debt and worries about the economy than ever before.  It’s as if people are projecting their concern about the economy on to the debt issue.  There is anger about the economic meltdown, and that has debt implications. We even see national security concerns related to China owning too many Treasury bonds, he said. Much of this is either new or at least more intense.

Other data support these points.  A Democracy Corps poll from June asked voters what they were thinking of when they said they disapproved of Obama’s job as president.  For those who cited negative policies, the highest percent referenced “fiscal irresponsibility.”

A Gallup poll from June found “federal debt” and terrorism as the most worrisome issues to Americans when they consider threats to the future well-being of the U.S. Among independents, “federal debt” stood alone as the most worrisome issue.

Voter perceptions of the economy will no doubt remain a key determinant in the November election.  What may have changed, however, is the perceived connection between rising debt and economic performance.  Scholars may not have been able to find much of a connection between deficits and election results in the past, but 2010 might change that equation.