Debt - Always a bad thing?

Recently, a friend at work and I were discussing the current financial and political situation in our land. My friend insisted that we have to pay off the national debt, if not for ourselves, then for our children. I said that would be a bad idea. Then he looked at me like I had just disclosed some horrid moral flaw.
How to explain? Well, here's a very simple explanation I saw on, of all things, Youtube. Watch and learn. (Use high quality mode.)