Is a "balanced budget law", even a flexible law that allows temporary deficits (and surpluses) in appropriate circumstances, the right way to think about prudent sustainable fiscal policy?
A financial asset is just a bit of paper with a promise written on it. A promise is a commitment about the future actions of the promiser, that is intended to influence the promisee's expectations of the promiser's future actions. If that promise is worthless, then the financial asset is worth what the paper itself is worth. The value of financial assets (almost) 100% about expectations (except for the paper itself).
Monetary policy is about the promises made by the central bank that determine the value of the financial asset it issues (central bank money); fiscal policy is about the promises made by the government that determine the value of the financial asset it issues (government bonds).
For monetary policy, there is a reasonably healthy debate about whether central banks should target inflation or target the price level path. You only see the difference when the central bank misses its target in one period. If it targets 2% inflation, but actual inflation is 1%, should it aim for 2% inflation the next year, or should it aim for above 2% inflation, to get the price level back on the target path?
For fiscal policy, the equivalent debate would be about whether governments should have a deficit target or a debt target. That's because inflation is the (percentage) rate of change of the price level per year, and deficit is the rate of change of the debt per year. There is an (almost) exact parallel between inflation vs price level path targeting and deficit vs debt targeting.
Which is best: a deficit target or a debt target?