Mine is afraid of balloons too!
I tied some balloons (from her baby shower) on my neighbors mailbox. Well, that is the way we take our walks. She left them out there for days and they would get lower and lower. Hot Rod would do the look and back step and every which way around them as he could and woof at them. It was so funny to watch. I would finally pick him up and let him sniff them. Then it would start all over again at the next walk.