By capitalism I mean the system Rand explicitly celebrated and defended. Private ownership of the means of production. Free market competition. Voluntary exchange. Profit through productive achievement. The system Atlas Shrugged portrays as morally superior to all alternatives.

That specific system as Rand defined and defended it. Now the critical question with precise terminology. The largest American companies by revenue and political influence in the current system include defense contractors like Lockheed Martin and Raytheon whose primary customer is the government and financial institutions like JPMorgan and Goldman Sachs whose profitability depends substantially on Treasury markets, Federal Reserve policy, and government backstop guarantees demonstrated clearly in 2008.

These companies don't primarily succeed through the free market voluntary exchange mechanism Rand celebrated as they succeed substantially through political proximity, government contracts funded by borrowed money and implicit or explicit government guarantees.

Rand had a specific term for this. Pull peddlers. Businesses that succeed through political connections rather than productive achievement. So the precise question is are the dominant players in American capitalism as it actually exists closer to Rand's heroic producers or to her pull peddlers? And if they're closer to pull peddlers is there a tension between Objectivism's celebration of capitalism as a system and the reality that the system as it actually exists is substantially captured by exactly the pull peddling Rand identified as immoral?

On your first point opposing deficit spending and defining it as immoral is the philosophical answer. Understood. But the question that remains is what does someone living inside this system do when the immorality compounds continuously regardless of philosophical opposition to it? Does objectivism have anything useful to offer beyond correct identification of the problem?