Next to former Bill Davis aide John Tory's denial that there is any need to end rent controls in Ontario (''I'm not sure that's true. If it had been, the previous Conservative government would have done it.''), the most extraordinary recent example of justification by faith is the American conservatives' defense of the Ronald Reagan deficits.

Just when we had grown weary of all those gloomy op-ed pieces and we'll-have- to-pay-for-it books, there now appears a spate of articles from impeccably Reaganite sources denying the reality, importance, and danger of the deficit, along, naturally, with its paternity. Problem, they ask? What problem? Deficit, shmeficit.

Conservatives have an understandable distaste for the hypocrisy of liberals, who never met a deficit they didn't like, now falling over themselves to denounce the devil debt. But it's just as hypocritical for conservatives to suddenly discover, a trillion dollars after the fact, that budget balance is not important.

You know things are getting out of hand when you see Milton Friedman arguing in the Wall Street Journal that the deficit, more than benign, is actually beneficial, and the assistant president of the International Ladies Garment Workers Union conducting a review of historic debt-to-national income ratios to warn New York Times readers of the perils of continued deficit spending.

So confused has the debate become that one must occasionally resurface and take one's ideological bearings in Canada. Sure enough, we read the reassuring words of Duncan Cameron, newly appointed editor of the leftish Canadian Forum magazine: ''The deficit, as such, is not a pressing problem.'' There. Thank goodness that's settled.

BLITHE SPIRITS

The case for carefreeness in the U.S. is instead made by such unlikely blithe spirits as former Treasury official Paul Craig Roberts, or the former Citicorp chairman, Walter Wriston. Their deficit defences are four: it's not our fault; it's not as big as it looks; it hasn't caused any problems so far; and it's better than the alternative. A fifth, it will pay for itself, was quietly retired around 1986.

It is doubtless entertaining to debate whether it was Reagan's military buildup and tax cuts that opened up the deficit, or the broken spending pledges of Congress and an unanticipated fall in inflation engineered by a reckless Federal Reserve. It's even possible to explain it as a product of the four combined. But it is irrelevant to the issue.

Likewise, to say that the deficit is falling as a percentage of gross national product, or is smaller on the same basis than that of other countries, or even, as Robert Eisner insists, that it does not exist if you take into account the capital spending and inflation components, is to take the wrong points of reference.

The proper measures of the deficit are against the supply of savings domestically, and the total demand for capital worldwide. If the deficit sucks up too great a share of domestic savings, then it must be financed from abroad; and if it is a sufficiently great part of world borrowing, the resulting capital flows will greatly unsettle global trade and investment regardless of accounting niceties.

The deficit apologists therefore have a job to do in claiming no ill effects. Their favorite tactic is to set up straw men, the usual sparring partners of frauds. Roberts, for example, harps on the failure of the deficit to cause higher inflation, when only the economically illiterate would ever say it should.

It is not enough, either, to point to the record of growth of the past seven years and leave it at that. Unless they are prepared to argue that the deficit actually sustained growth, then there is nothing to say that growth could not have been higher than it was, nor that it will necessarily continue.

As for the reliance on foreign capital, the supply-siders still maintain it reflects only the attractiveness to foreign investors of lower U.S. tax rates. This is growing harder to support as foreign tax rates align with the U.S.'s, but, in any case, it again avoids the question of how to manage the growing mountain of foreign debt and the resulting precarious state of the currency.

Lastly, we come to Friedman's dictum: that the deficit is at least better than higher taxes as a means of reining in spending. ''Taxes have been going up for 50 years without any apparent success in eliminating deficits,'' he notes. I've got news for him: deficits have been going up for 30 years without any success in reducing spending. Borrowing is too seemingly painless to check the political appetite: the tighter belt is taxes.