Painful Truths

Political movements grow when they confront their own painful truths; they collapse when they indulge in self-admiration and flattery.

One painful truth that the conservative movement needs to confront is fiscal discipline, or the lack of it; I think it is fair to say that the conservative movement in general and GOP in particular, have abandoned fiscal conservatism.

By fiscal conservatism I mean a balanced budget. Does anyone remember how Reagan barnstormed through the country all during the 70’s expounding on a balanced budget amendment to the Constitution? For a while it was the favorite topic of conservatives. However, once in office, he abandoned that, in favor of tax cuts and a military build-up. Maybe good things, but still, we have been living with deficit spending ever since. No Republican at any level of government has made a serious proposal to balance the budget since 1981.

Instead the movement was seduced by the snake oil of supply side economics, or the Laffer Curve, which put forward the notion that cutting taxes will raise revenue. This can be true, but only in very limited circumstances, and only in modest doses. For anyone who thinks otherwise, I would ask- where is the real world proof of this? Reagan cut taxes, and ended up with a budget deficit every single year; so did Bush I; and Bush II; the latter is especially painful, given that the GOP held all the mechanisms of government for much of the time.

This was called “Voodoo Economics” by Bush I, and rightly so; it is just the conservative version of the “free lunch”, where we can enjoy low taxes, and high spending. But, some may protest, there were mitigating factors- a recession, a war….but hasn’t this always been the case? More importantly, won’t it always be the case? The future is uncertain, but what we do know with certainty is that there will always be a recession waiting for us, and a war or disaster to consume emergency funds. Running deficits year after year, praying for another dot-com or housing bubble to inflate the treasury is madness. The Republicans made a Faustian deal with the Dems- the Dems get ever-higher spending, which is popular, and the Republicans get tax cuts, which are also popular, and they both walk away happy. Except that this is leading to economic suicide somewhere down the road.

I think if the conservative movement wants to really be taken seriously, they need to get serious and discuss what it would take to restore fiscal sanity to the government. The Republicans used to be the “green eye shade guys”, the grownups who were sober and sane, telling the Dems that there is no free lunch.

I think we need to stop the fixation on tax cuts- Federal marginal tax rates are actually lower now than they have been in a generation- and stop tolerating pork projects. Pork, by the way, includes a very large chunk of military spending.

This is a deeply unpopular position, I know- nothing screams “electoral loser” like a proposal to cut spending AND/OR raise taxes.

However, the good news is that there is a growing unease with deficit spending, and the time may be right for a case to be made that we would be better off with a combination of spending cuts and higher taxes, than the alternative which is economic collapse.