It’s time for true fiscal conservatism to assert itself
By instinct and upbringing, I’m a fiscal conservative. The family credit cards are all paid off, for example, and I still drive the first new car I ever bought, a 1980 Toyota.
Politically, I’m a fiscal conservative as well. No, not a fiscal conservative as the GOP has tried to define it, but an actual fiscal conservative. I believe that in normal times the federal government ought to be raising as much in tax revenue as it spends, and spending no more than it brings in. (Note that these are not normal times.)
The Republican Party has tried, with some success, to redefine “fiscal conservative” by looking only at one side of the ledger. A fiscal conservative in GOP parlance is someone who cuts taxes, period.
Oh, they give lip service to cutting spending. They promise it, but they never deliver it. Quite the contrary. Federal spending under Ronald Reagan, for example, increased much faster than it did under Bill Clinton, even after adjusting for inflation. But since Reagan also cut taxes, he is recalled by some as a fiscal conservative.
At one level, putting together a federal budget is not at all complicated. You face two basic, simple policy decisions:
– Are you going to cut spending or raise spending?
– Are you going to cut taxes or raise taxes?
Combining those choices from either side of the accounting ledger gives you four basic policy directions, ranked here in order of fiscal conservatism. You can:
1. Cut spending and raise taxes.
2a. Cut spending and cut taxes.
2b. Raise spending and raise taxes.
4. Raise spending and lower taxes.
The most fiscally conservative approach is clearly the first, especially when the national debt is so high. Ideally, the fastest means to bring our economic house into order would be to both cut spending and raise taxes. But politically, no one has come close to pulling that approach off and no one will. It is a political reality that no one of either party can get elected or stay in office by cutting entitlements, which is where the big savings would be.
Fiscally speaking, options 2a and 2b can be equally responsible. But again, the option of cutting spending is not politically viable. (Cutting can be accomplished in individual programs, but cutting to produce an actual reduction in federal spending is impossible.) Republicans can and do claim to champion option 2a, but nothing in their record in office suggests they are serious about it.
The least fiscally conservative approach, the approach that is least fiscally responsible, would be No. 4. That is also the approach that “fiscally conservative” Republican leadership at the national level has pursued with dogged determination, in good times or bad.
President Obama claims to want to change all that. In these extraordinary times, even most conservative economists agree that large deficits are required to keep the economy afloat. But in his speeches in China and here at home, Obama has acknowledged that such deficits have to be temporary, that they cannot be sustained at anything close to these levels over the long term without bringing economic ruin.
I don’t know how serious he is about it. We’ll see. He is talking about spending cuts, and they are absolutely necessary. But in the real world such cuts can only shrink the rate of increase. They cannot reverse it, and Obama knows it. Given the upward pressure on the budget, the only feasible means of addressing the longterm debt crisis is through tax increases.
That statement will no doubt be met by howls of protest from the tea-party crowd, which has accepted as an article of faith that they are wildly overtaxed by a confiscatory federal government. The numbers say they’re wrong; the numbers say that as a percentage of GDP, federal taxes today are well within the range established in the last 40 years, and would remain so even with tax increases.
Of course, forced to choose between actual facts and comforting myth, a lot of people would choose the myth. But myths don’t pay the bills. Myths don’t bolster the dollar. Myths don’t save our grandchildren from the immense bills we’re handing them as a legacy.
Assessing our options, you might even say that Obama and the country as a whole face the same question posed by the poet himself oh so many years ago:
2b, or not 2b?
Tell us what you think about the site
Customer Care »
Vacation stops, manage subscriptions and more
AJC Services
Sections
Other Editions
Guides
Visitor Agreement | Privacy Statement
© 2011 The Atlanta Journal-Constitution
200 comments Add your comment
I Report (-: You Whine )-: mmm, mmmm, mmmmm!
November 17th, 2009
9:13 am
Where does health care and cap/ tax fit into all this?
Peadawg
November 17th, 2009
9:14 am
“Oh, they give lip service to cutting spending. They promise it, but they never deliver it.”
Kinda like what Obama’s done, huh Bookman?
Normal
November 17th, 2009
9:20 am
This is more applicable to below, but it is interesting reading…
http://www.thenation.com/blogs/thebeat/496616/no_sarah_palin_is_not_the_next_ronald_reagan
Mrs. Godzilla
November 17th, 2009
9:22 am
Pardon me…..
Option #3?
Jimmy Carter
November 17th, 2009
9:24 am
“China questions costs of U.S. healthcare reform… ”
I guess the billion or so chinese population are part of the “conned”, right liberals?
Doggone/GA
November 17th, 2009
9:25 am
“Option #3?”
When there are, as in this example, only 4 options…and 2 of them are variations of the same thing, then you do as Jay did label them 2 & b, an skip the next number.
I wouldn’t have done it that way…but then there would have been no opportunity to say “2b, or not 2b?”!
Gale
November 17th, 2009
9:25 am
And Mrs G busts Jay for his levity at the cost of his numbered list. Well done, Mrs Godzilla.
Shawny
November 17th, 2009
9:25 am
Liberals rant and rave about Reagan’s plung into deficit spending. Yes, he started us down that path. However, Obama’s budget has us spending a higher spending of GDP than Reagan’s. That puts us at apples and apples as far as a comparison. Stop the spending madness now.
Taxes are high enough to pull in enough revenue. What is needed, badly, is a deviation from this spending spree.
No need for healthcare that spends trillions.
No need for more stimulus.
No need for wasted cash for clunkers.
Anything from Congress should stand on its own as a law. No inserting spending measures into a bill that have nothing to do with the bill.
Cut postal delivery to 4 days (not the proposed 5, mind you).
Cut till it hurts.
jt
November 17th, 2009
9:26 am
Jay is STILL working under the illusion that the Republican and Democrat parties offer a choice.
Gale
November 17th, 2009
9:26 am
Doggone, not the way I was taught.
I Report :-) You Whine :-( mmm, mmmm, mmmmm!
November 17th, 2009
9:27 am
Me, um, liberal likum livin the cave and burnin the wood, ugh, drag woman by hair, it’s back to the 2nd century with us.
No shopping, eww.
Ugh.
Jimmy Carter
November 17th, 2009
9:27 am
“The worst is yet to come: Unemployed Americans should hunker down for more job losses…”
Thank you, obamanomics.
Bosch
November 17th, 2009
9:29 am
Doggone! Well done!
Boogers for the Children Fund
November 17th, 2009
9:29 am
Kinda like the people on welfare/food stamps paying lip service to wanting a job.
Kinda like Alanis Morrisette being one of the most irritating Canucks in recent history.
Kinda like Ms Cynthia Tucker paying lip service to being the 2010 AJC calendar girl, yet refusing to sit for photo sessions.
Kinda like Obobo paying lip service to every issue and doing not much of anything.
Kinda like The Goron paying lip service to global climate change yet living like the Emporer of Peru with his new fangled A/C and eating chicken pot pies.
Kinda like the guilt laden posters on this blog who want it all yet are willing to sacrifice not much of anything to achieve same.
Kinda like Van Halen replacing David Lee Roth with Sammy Hagar.
Kinda like Adam Sandler being part Jewish.
Kinda like BMW’s being highly overrated.
Doggone/GA
November 17th, 2009
9:29 am
“Doggone, not the way I was taught”
You missed the point.
Gale
November 17th, 2009
9:29 am
Given the costs, I think Congress needs to scrub the current bill/s and focus on cutting health care costs. Forget insuring everyone. Just make it cheaper to treat the uninsured. Reduce costs first.
Normal
November 17th, 2009
9:30 am
In Normalville, in normal days we have a balanced budget, surplus in savings, and a pay as you go system. China has no hold on Normalville and the products of American Industries fill the shelves of our stores.
Mrs. G.’s resturant serves the finest foods grown on the Normalville farms, inspected, packaged, and certified by the good citizens of Normalville. Normalville, requiring no outside help, but willing to help others when asked. Used to be called America.
Jimmy Carter
November 17th, 2009
9:30 am
“Obama Has Failed the World on Climate Change”
“US President Barack Obama came to office promising hope and change. But on climate change, he has followed in the footsteps of his predecessor George W. Bush. Now, should the climate summit in Copenhagen fail, the blame will lie squarely with Obama.”
Al Gore will surely be disappointed.
Redneck Convert (R--and proud of it)
November 17th, 2009
9:30 am
Well, me and my buddy Jim Earl and Joe Bill were watching TV last night down at Billy Bob’s and they showed this Obama bowing to this slant-eye overseas. Talk about hot under the collar. We got fighting mad. The idea of a President of the U.S. of A. bowing to anybody just burns me up. But there it was for everybody to see. If this don’t make people want to vote for a Republican for President I don’t know what will. It’s clear to anybody with eyes the librul Democrats got no pride.
What he ought to of done was use Republican Diplomacy. Instead of bowing, he should of undid his zipper and pulled it out and told this bunch of yellow people what they could do if they don’t like what our country does. And maybe invade some little country just to make a point of it. And hang their leader after the war was over. You don’t get no respect by bowing to somebody. But they sure will pay attention to you if you body-slam them.
Anyhow, people made a big mistake by voting for this Obama. But in three years or so they got a chance to make up for it. And next year they can make a down payment by voting in Conservative Republicans to Congress. We can make a start toward stopping this Obamacare stuff and all the Socialist welfare bills and bring back Pride to this country. And bring God back to our schools and guvmint places. And keep My President’s tax cuts in place to boot.
I’m sorry for ranting and being off-topic a little but I’m still burned up. Now for today’s topic. I’m for cutting taxes and cutting spending. Get rid of taxes. Get rid of Social Security and Medicare and all these welfare programs. It’s a jungle out there and people need to live in it. As one fellow said, you better be a lion or tiger, not a wildebeest or a antelope.
Have a good day everybody.
Bosch
November 17th, 2009
9:31 am
BLOG GOD!!! What?
Soothsayer
November 17th, 2009
9:32 am
But one day this bubble will burst, leading to the biggest co-ordinated asset bust ever: if factors lead the dollar to reverse and suddenly appreciate – as was seen in previous reversals, such as the yen-funded carry trade – the leveraged carry trade will have to be suddenly closed as investors cover their dollar shorts. A stampede will occur as closing long leveraged risky asset positions across all asset classes funded by dollar shorts triggers a co-ordinated collapse of all those risky assets – equities, commodities, emerging market asset classes and credit instruments.
Nothing Is Free
November 17th, 2009
9:33 am
Normal
Well, that settles it. Sarah Palin is OUT.
it’s not like Obama has ever had an article written about him that wasn’t in the best light.
She’s back and you might as well deal with it.
But the real question is, why are liberals so up in arms if she is so “normal”. Why would the best politicians in the world be so intent on discrediting her. And better yet, why are so many liberals now giving mags like “The Nation” so much credibility?
AmVet
November 17th, 2009
9:33 am
Both political parties have been completely fiscally irresponsible.
And many members thereof should probably be in jail for malfeasance of the people’s money.
Ending most of the massive giveaways to corporations in terms of subsidies, tax breaks, tax shelters, uncollected tax evasion, fraud, abuse and corruption would go a LONG way to balancing the ledgers. Collecting rents and payments for the assets and services of WE THE PEOPLE that have been GIVEN away to them should start immediately.
And drastically decreasing the BLOATED, disgustingly wasteful, fraudulent and abusive DoD budget would also pay big dividends for we the people.
If we’ve learned anything from this Republican War on Terrorism, it is that national security is a just a throw away by line in a very expensive joke…
Scooter
November 17th, 2009
9:33 am
Jay, you just gave me a whole new outlook on libs and cons. Now I am really confused. Whew!
Bosch
November 17th, 2009
9:34 am
I guess not.
Gale
November 17th, 2009
9:35 am
NIF @9:33 answer, in a word, propaganda.
Jay
November 17th, 2009
9:38 am
Bosch, the term “tea-bagger” and all variations is now verboten.
Bosch
November 17th, 2009
9:39 am
Oh, okay. Well, then I’ll just have to think of something else!
Scooter
November 17th, 2009
9:40 am
Normal
November 17th, 2009
9:30 am
AMEN Brother!
Boogers for the Children Fund
November 17th, 2009
9:41 am
Ending most of the massive giveaways to bums, unwed mothers, baby-mamas in terms of subsidies, tax breaks, tax shelters, uncollected tax evasion, fraud, abuse and corruption would go a LONG way to balancing the ledgers. Collecting rents and payments for the assets and services of WE THE PEOPLE that have been GIVEN away to them should start immediately.
And drastically decreasing the BLOATED, disgustingly wasteful, fraudulent and abusive welfare/food stamp budget would also pay big dividends for we the people.
Jimmy Carter
November 17th, 2009
9:42 am
Jay, nice piece. I, too, am a fiscal conversative in the truest sense of the word. I drive a vehicle with slightly over 290K miles. I estimate the repairs (I don’t include maintenance because even a new care will require maintenance) to be about $1K per year. That means my vehicle’s operating cost (again, I don’t include maintenance) to be less than $100 per month. Now, if I could find a new car that seats 5 for $100 per month, then I might take the plunge.
Taxpayer
November 17th, 2009
9:42 am
Doggone,
Jay’s job joins the jaunts of the jib jabbers with the jarring jargon needed to justify the jest. A little light-heartedness sometimes eases the entry, or exit as the case may be, into the more somber subject.
Bosch
November 17th, 2009
9:42 am
It seems that many of those concerned about a raise in our taxes think that their lifestyles will somehow be changed so dramatically, that they will be ruined and wind up living in a van down by the river or in a cardboard box under a bridge.
Nothing Is Free
November 17th, 2009
9:43 am
GAle
The propaganda will become more and more common about Mrs. Palin. SNL started it and wasn’t it effective? What did Sarah actually say and what did Tina Faye say? Comedy Central is propaganda. Political messages and political training in the form of entertainment is propaganda. Yellow journalism is a different thing. You know what you will get if you watch FOX and you SHOULD know what you will get if you watch NBC, CBS, ABC, CNN, MSNBC, PBS or NPR.
PinkoNeoConLibertarian
November 17th, 2009
9:43 am
AmVet, if we do away with business tax breaks, subsidies, tax shelters, etc., then the free enterprise system would not work since we all know they need help to compete. Wait…what?
jconservative
November 17th, 2009
9:44 am
National debt 1960 – $260 Billion.
National debt 11/13/2009 – $11,991,506,876,413.07
You may thank all of the “fiscal conservatives” who have helped “run” the country for the past 49 years. “Run” the country into the ground!
The American people are addicted to getting “free” from the government.
Whether it is “welfare for a mom with 4 kids & one on the way” or whether it is a “refund check” from the “surplus”, it is still that something free from the government. (Y’all all remember the “Surplus” don’t you? Five Trillion dollar national debt but we all got a check from the “Surplus”.)
We, as a nation, will do what we have done for the past 49 years, we will do # 4 – “Raise spending and lower taxes.” That is what Obama has done in his first 10 months – and what every president since Eisenhower has done.
Jay
November 17th, 2009
9:44 am
“Ending most of the massive giveaways to bums, unwed mothers, baby-mamas in terms of subsidies, tax breaks, tax shelters, uncollected tax evasion, fraud, abuse and corruption would go a LONG way to balancing the ledgers. Collecting rents and payments for the assets and services of WE THE PEOPLE that have been GIVEN away to them should start immediately.”
It would barely be a drop in the ocean. On the scale of the federal budget, the amount of money spent on the things you describe is small and almost minuscule. That is part of the comforting myth you are being fed, a myth that the actual numbers refute.
pat
November 17th, 2009
9:45 am
You mean the he’s going to increase taxes on everybody even though he said he would only tax the “rich”? Do tell… Ok, so he is a liar, nothing new there.
Boogers for the Children Fund
November 17th, 2009
9:47 am
“Comedy Central is propaganda. Political messages and political training in the form of entertainment is propaganda”
Comedy Central isnt much worth watching any longer, unless they feature the Queen of Mean – Ms Lisa Lampinelli, and SNL hasnt been funny since Joe Piscapo did his renditon of Frank!
Nothing Is Free
November 17th, 2009
9:49 am
Bosch
Haven’t seen a lot of talk about people living in cardboard boxes. In your words: care to offer some proof?
But businesses that need to spend more on taxes will not be able to apply that money to new employees, and those people could end up in a box by the river. That is a fact. People need jobs. Haven’t you heard?
Scooter
November 17th, 2009
9:51 am
Ending most of the massive giveaways to corporations in terms of subsidies, tax breaks, tax shelters, uncollected tax evasion, fraud, abuse and corruption would go a LONG way to balancing the ledgers. Collecting rents and payments for the assets and services of WE THE PEOPLE that have been GIVEN away to them should start immediately
I don’t know about you AmVet but I can’t see that happening. Not in my lifetime anyway. What a mess!
Normal
November 17th, 2009
9:54 am
NIF, here’s another for your amusement…
http://www.thenation.com/doc/20091130/blumenthal
Nothing Is Free
November 17th, 2009
9:54 am
Boogers
Comedy Central is great if you are of that political ilk and can stand up and cheer while saying “THat’s right. That’s showing those damned Republicans. So for the sheep, it’s great.
Nothing Is Free
November 17th, 2009
9:56 am
Nrmal
After reading the first paragraph, it is obvious that yet another has exclaimed “To the bandwagon”.
I’m not really a bandwagon kind of guy. I like to make up my own mind.
Bosch
November 17th, 2009
9:57 am
NIF,
I wonder how the math matches up: amount of money spent in taxes vs. amount of money spent on health care for employees. It would be interesting to see how much a business spends and how those two directly effect the bottom line.
Soothsayer
November 17th, 2009
9:58 am
Hong Kong: “America is doing exactly what Japan did last time”
The Federal Reserve’s policy of keeping interest rates near zero is fueling a wave of speculative capital that may cause the next global crisis, Hong Kong’s leader said.
“I’m scared and leaders should look out,” said Donald Tsang, chief executive of the city, said in Singapore today. “America is doing exactly what Japan did last time,” he said, adding that Japan’s zero interest rate policy contributed to the 1997 Asian financial crisis and U.S. mortgage meltdown…
“We have a U.S. dollar carry trade at the moment,” Tsang, 65, said in a speech where leaders of the Asia Pacific Economic Cooperation forum are gathering for a weekend summit. The carry trade is where investors borrow cheaply in one currency and use the funds to invest in other currencies.
“Where is the money going — it’s where the problem’s going to be: Asia,” Tsang said. “You can see asset prices going up, not only in Korea, in Taiwan, in Singapore and in Hong Kong, going up to levels that are incompatible or inconsistent with the economic fundamentals.”
MELTDOWN: The Sequel. If you enjoyed the original, you’ll really like this one!
Taxpayer
November 17th, 2009
9:59 am
Booger. Turd. Different ends to the same means.
mm
November 17th, 2009
10:01 am
So true Jay. No comment necessary on that one.
Alas, today the Palin book comes out. I see Palin’s approval numbers are about the same as Bush’s were. Obviously, the same crowd of loons support her like they did Bush.
Another day on the blog and still not an original thought from any of the righties.
Nothing Is Free
November 17th, 2009
10:01 am
jconservative
**The American people are addicted to getting “free” from the government.**
I disagree. You have it backward. We have one political party who makes it’s living by spawning a “Great Society”, which is nothing but human warehouses of people being fed and clothed, while waiting for the next bus to the polls and the other party doesn’t have the political acumen to fight it.
The government looooves to give money away. After all, it isn’t their money.
getalife
November 17th, 2009
10:01 am
The easiest way to pay off the defeicit is to layoff Congress until it is paid.
Like their corporate masters, layoffs until they turn a profit.
Also, tax cuts for everyone will cut the money they spend and borrow.