From dKosopedia

Origin

Dick Cheney quote as recalled by Paul O'Neill in his book The Price Of Loyalty (ISBN 0743255453). Cheney responds to O'Neill's arguing against a second round of tax cuts during the GWB administration by saying:

You know, Paul, Reagan proved that deficits don't matter. We won the mid-term elections, this is our due.

Cheney has since denied saying this.

Sightings

Deficits don't matter - (Townhall.com, Jonah Goldberg, 5 March 2004)

Analysis

What did Cheney mean by this? Deficits don't matter to the economy? They don't matter to the republican elite? They don't matter politically (to the GOP)?

Maybe they mean that if deficit spending stimulates the economy enough, the increased tax revenue will offset the lost tax revenue. So it's only a temporary deficit, like taking out a loan on a sure thing investment, to be repaid when the sure thing pays off. Taking this one step further, if you can keep the economy growing at a faster rate than the interest rate for your loan, you'll never have to pay off the loan.