The idea that government spending pays for itself is plainly false. Servicing the debt is now a very large portion of our budget. The previous generation’s government spending all of the money it claimed to be saving for SS and Medicare have to instead be paid by my generation for those retirees. This is real money.
Balancing the budget would hurt the definition of our GDP because government spending is part of the equation. Though it’s impact in the real world would depend on a number of factors. There are aspects of the government that serve almost no role other than to push paper or to harass everyday citizens. We cut those out and allow those people to then get jobs that their fellow citizens want to pay them to do then we will have helped our economy in the real world(this could have some short term pain of course). If those cutting the budget want to do so in a spiteful manner and cut services that the public actually wants their government to do then we certainly could have a negative impact.
Revenue to our combined federal, state, and local governments is higher than the GDP of all other countries save China. Acting as if it is harmful to restrain our spending to this very large amount is disingenuous at best. Not cutting spending is simply our government not doing its job. It is very easy to not cut spending. Just give everyone the same money plus a % increase. Very easy to do when it isn’t your money being spent. Ultimately though it is harmful. Times change and different policies and programs become more and less effective. We need to pay attention to this and prioritize. The private sector does this automatically(unless propped up by the government). Resources go to more effective ways to do things. Small retail shops give way to big box stores which give way to Amazon. Where is the impetus for change in the public square? Without having to balance a budget it doesn’t exist.