Fiscal Conservatism is Dead

Lauren Reiff
Jan 20 · 5 min read

Fiscal conservatism is not only a dying idea, but has been a dead discipline for longer than we’d like to admit. The Republican Party of today has largely abandoned actions of budgetary constraint, though a thin hold remains on the pat-yourself-on-the-back notion of it. Essentially, the gap between practice (i.e. what is done) and theory (i.e. what is believed) has widened considerably.

In an alarming fashion, Republicans increasingly don’t care about deficits, debt or government spending hardly at all! And they appear to have made an unspoken agreement to ignore the sticky presence of it altogether, believing it to be a discussion in vain.

This watering-down of one of the core ideological tenants of conservative doctrine is deeply unfortunate. Running away from fiscal conservatism has risky long-term consequences, one of which is putting our collective liberty in jeopardy.

What Republicans of the past had to say about it

Yes, I really do have to invoke the ghosts of the Founding Fathers for this one. Despite varying degrees of social open-mindedness, if there’s one thing that our nation’s engineers and intellectual masterminds had in common it was a belief in the merits of avoiding debt and living within one’s means.

What’s interesting about this particular belief is that its roots travel down to an even bigger idea, if you dig far enough. It was this concept: The proper management of the nation’s finances reduced liabilities and preserved freedom for its inhabitants. Fiscal conservatism, properly understood, is something of a moral responsibility.

John Adams summed it up in bold, straightforward language:

“There are only two ways to conquer and enslave a nation. One is by the sword and the other is by debt.”

His presidential successor Thomas Jefferson concurred with this view remarking,

In practice, the Founding Fathers realized, debt bloated the apparatus of the state, made people more beholden to what was necessarily bad governing, and served as an ingredient in potential economic crises, none of which they regarded favorably.

Fast forward a century and a handful of modest and wise Republican presidents stick out as some of the last gems of fiscal conservatism. Calvin Coolidge is one such example, helming the great decade of the 1920s and so too is Dwight Eisenhower of the 1950s. Both were stable, principled men that eschewed more politically appealing projects, choosing to take on the unexciting, somewhat laborious tasks of balancing the federal budget and paying down the national debt instead. But it was work that had to be done and their presidencies go down as good times.

We think we are just too sophisticated

There’s one reason why nobody is fiscally conservative anymore: Everyone seems to believe that its discipline is a fiction, that it constitutes needless restraint.

Despite enjoying a bit of an impassioned comeback in the years following Obama’s stimulus program and the bailout scandal of ’08, Republicans not only failed to translate this angst into action once in office, for the most part, they just gave up on the notion of cutting the government down to size altogether!

Sure, there might be some talk of slashing government spending. But actual effort that puts a dent in things? Forget about it — in part because no one honestly believes that there is much to fear from continuing our diet of expenditure excess and watching our national debt level incline.

Granted, there’s a rather important technical reason for why political leaders don’t worry themselves over deficits anymore. The U.S. Treasury has nearly unlimited power to print money to fund nearly anything imaginable due to being untethered from the gold standard of yore which previously restrained the degree to which Washington could inflate the money supply.

Nowadays, restraint seems primitive, even a bit of an affront. The national debt is thought of as something faraway and imaginary. Through clever mechanisms of glorified money-printing it was thought that the consequences of fiscal hedonism could be outrun or extinguished from existence.

But just because we’ve thrown fiscal conservatism out the window and nothing explosive has happened yet doesn’t mean it won’t ever. Republicans tiptoed away from this principle, in part, for political gain. Federal finances developed to become so out-of-whack with debt outstripping GDP and the march of unsustainable entitlement programs that addressing it seemed like a wasted project.

But debt and poor financial decisions always have karmic import. Throughout history few are able to escape its eventual bite.

When it comes to finances, Democrats and Republicans are starting to look the same!

“When the Democrats are in power, Republicans appear to be the conservative party. But when Republicans are in power, it seems there is no conservative party.” U.S. Senator Rand Paul(R-Kentucky)

Fiscal limitation or lack thereof used to be a genuine means of separation between the Democratic and Republican parties but such restraint has mostly vanished out of existence, making the economic realities of blue and red presidencies in recent decades look nearly indistinguishable. Typically, the most obvious way to characterize the two partisan halves is that Democrats prefer stimulus spending to induce economic growth while Republicans prefer tax cuts. But currently, both avenues when pursued just put us deeper into debt. Which is to say, they mostly do the same thing!

This is because on the political Right, traditional precedent long held that tax cuts were appropriately paired with corresponding spending cuts. But seeing as this balance of accounts is not a focus anymore, both parties must engage in deficit spending to finance their respective vaunted political projects. Thus, tax cuts are proposed largely because they satisfy constituents even though an honest assessment of their long-term effects would look more grim than improved.

From this lack of attention to deficits do we catch a glimpse of the underlying problem: an abandonment of principle, a crumbling belief in the moral responsibility that is keeping the financial affairs of the nation in order.

If nothing else, we ought to remember that debt enslaves and runaway government spending wastes. Neither of these things are wise and neither can be practiced indefinitely without consequences coming to the fore for those that it concerns — which is all of us.

The underlying logic of fiscal conservatism has long been the preservation of liberty for American citizens. To lament the death of fiscal conservatism is to lament not only the dying virtue of self-discipline but the equally concerning disappearance of foresight.

Lessons from History

Lessons from History is a platform for writers who share ideas and inspirational stories from world history. The objective is to promote history on Medium and demonstrate the value of historical writing.

Lauren Reiff

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writer of economics, psychology, and lots in between. forever in love with words —

Lessons from History

Lessons from History is a platform for writers who share ideas and inspirational stories from world history. The objective is to promote history on Medium and demonstrate the value of historical writing.

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