Spending causes various kinds of deadweight loss: Outright waste, rent-seeking by negative-output industries, do-nothing jobs and does-nothing purchases, some r

Spending causes various kinds of deadweight loss: Outright waste, rent-seeking by negative-output industries, do-nothing jobs and does-nothing purchases, some regulations have large financial externalities, war and war accessories. Taxes are mostly outside of government control, so more spending implies more debt. Reducing debt implies reducing spending, and therefore less loss. You're right that it's not the debt itself (or even the spending) that matters, but it's a good enough proxy.