Deficit Chickenhawks

The realities of Trump’s first term demonstrate pretty clearly that Make America Great Again, Again will be far from a fiscally conservative enterprise.

In the midst of the COVID-19 pandemic and all that’s gone along with it, it’s easy to forget what the big headline stories were not so long ago. But some of those stories go hand in hand with where we’ve come as a country. Specifically, our ability to respond to crisis has suffered because we did not prepare in times of plenty for such difficult times as we find ourselves in today.

Even in the midst of what President Trump lauds as “the greatest economy in history,” the deficit just last year reached new heights. In fact, 2019’s deficit increased to the level of the Obama stimulus years. But, perhaps the starkest development has been the trickle-trickle of former budget hawks and fiscal conservatives that have stepped forward in recent years to defend the federal government’s out-of-control spending.

In a candid, and frankly disturbing, February 7th MSNBC interview, Mike Pence did just that. Not only did he defend the deficit spending of the Trump administration, he argued the deficit was a trade-off for the booming economy of recent years. While he said the budget would be a second-term priority, he says the priority of the first-term was to “get this economy rolling.” (Question: If that’s what was required to get the economy rolling in far better times, can we conclude that, on this side of 2020, we can expect little to no efforts to balance the budget in any significant way if Trump wins a second term?).

Pence connected the deficit spending to the President’s “first and foremost” goal, which was “to restore growth.” Even concerning the future outlook of the budget, Pence conceded that Trump believes “the real long-term solution to the fiscal challenges in Washington, D.C., is making sure the budget of every American is growing.”

Seemingly benign, these statements are a clear departure from fiscal conservatism, and the ideals of conservative government generally. One need not be brushed up on their Hayek or Friedman to know that spurring economic growth through deficit spending has long been something conservative and classically liberal economists have warned about. Government inserting itself into the free market is the chief origin of market “bubbles” that eventually burst and create recessions and depressions.

Conservatism, instead, has long focused on limiting government intrusion into the free market and citizens’ bank accounts. Until only a few years ago, conservative talk shows routinely mocked the idea that the government could spend better than individuals could with their money. Now, Pence and others seem to defend the idea of a centrally planned economy, with the President as the country’s CEO. This reflects what most political theorists would consider a progressive vision, if not one that approaches a socialist one.

But, the deficit spending of the Trump administration violates even the progressive principles as laid out in Keynesian economic theory. President Obama, for example, justified deficit spending as a way to lift the United States out of a recession but said such spending should be canceled out by running surpluses in good years.

Mike Pence’s comments suggesting the necessity of deficit spending to keep the economy rolling invites a troubling conclusion: Either the economy is doing well independent of the deficit spending, despite what they claim, and the Trump administration is simply inept and unable to achieve a balanced budget, or the Trump economy is a mirage built on the continuance of Obama fiscal policy, a bubble being fed by the government’s infusion of hundreds of billions of dollars into the economy.

Either way, the economic outlook of whatever might be termed the Make America Great Again, Again plan offers little hope for an effective pandemic recovery, and likely, once again, has very little to do with a spending regime that could ever be considered fiscally conservative.