Dwain Northey (Gen X)

Fiscal conservatism is a political position (primarily in the United States of America) that calls for lower levels of public spending, lower taxes and lower government debt. Fiscal conservatism may also support limited periods of higher taxes in order to lower the public debt. It can include any or all levels of government, federal, state and local. Fiscal conservatism is typically justified in terms of economic efficiency (it assumes the private sector is more efficient than the public sector), and in moral terms with high spending, budget deficits, and high debt seen as indicators of corruption. In opposition to corruption fiscal conservatism develops classic themes of republicanism that emerged in the era of the American Revolution. Fiscal conservatism rejects the Keynesian policy of deficit spending.

Fiscal Conservatism was rhetorically promoted during the presidency of Ronald Reagan (1981-1989). During his tenure, Reagan pushed through economic policies which became known as Reaganomics. Rooted in a belief in supply-side economics, Reagan cut income taxes, raised social security taxes,(actually taxed social security for the first time) deregulated the economy, and propounded a tight monetary policy to stop inflation. Reagan favored reducing the size and scope of government because he considered it to be conducive to inefficiency and corruption; he especially attacked welfare. He proposed greatly increased defense spending (which he got), reduction in income taxes (which he got), and reductions in domestic spending (which he did not get). The result was a large increase in the national debt, economic prosperity, and rapid growth. Reagan also achieved a compromise on Social Security that reduced long-term federal spending.

However, by the end of Reagan’s second term the national debt held by the public rose from 26% of Gross Domestic Product in 1980 to 41% in 1989, the highest level since 1963. By 1988, the debt totaled $2.6 trillion. The country owed more to foreigners than it was owed, and the United States moved from being the world’s largest international creditor to the world’s largest debtor nation as investors around the world rushed to send their money to the U.S.^[8] Under Democrat Bill Clinton the federal government ran a budget surplus and the debt went down. The George W. Bush policy was to return the surplus to taxpayers by lowering federal income taxes, even as spending increased, especially for the Iraq war. Democrats attacked the Bush policy as a violation of fiscal conservatism.

Today’s Republicans are continuing to achieve recording spending the same move that Reagan succeeded in doing in his second term. Not only does the current GOP like to spend like drunken sailors when they hold the wheels of power, they always cry debt when they lose the reigns. And now true to form the Republican House is threatening to blow up the full faith and credit of the United States by refusing to raise the debt ceiling, which they have done without question when a Republican is in the White House, unless Biden cuts his own throat and defunds the very programs that have saved us from Dumb Donald’s 4 years.

How can the “fiscal conservatives” be so bad with money? Honestly because they don’t care and refuse to learn the lessons from history.

On January 8, 1835, President Andrew Jackson achieves his goal of entirely paying off the United States’ national debt. It was the only time in U.S. history that the national debt stood at zero, and it precipitated one of the worst financial crises in American history.

The elimination of the national debt was both a personal issue for Jackson and the culmination of a political project as old as the nation itself. Since the time of the Revolution, American politicians had argued over the wisdom of the nation carrying debt. After independence, the federal government agreed to take on individual states’ war debts as part of the unification of the former colonies. Federalists, those who favored a stronger central government, established a national bank and argued that debt could be a useful way of fueling the new country’s economy. Their opponents, most notably Thomas Jefferson, felt that these policies favored Northeastern elites at the expense of rural Americans and saw the debt as a source of national shame.

Jackson, a populist whose Democratic Party grew out of Jefferson’s Democratic-Republican Party, had a personal aversion to debt stemming from a land deal that had gone sour for him in his days as a speculator. Campaigning for re-election in 1832, Jackson vetoed the re-charter of the national bank and called the debt “a moral failing” and “black magic.” Jackson vetoed a number of spending bills throughout his tenure, putting an end to projects that would have expanded nationwide infrastructure. He further paid down the debt by selling off vast amounts of government land in the West and was able to settle the debt entirely in 1835.

Jackson’s triumph contained the seeds of the economy’s undoing. The selling-off of federal lands had led to a real estate bubble, and the destruction of the national bank led to reckless spending and borrowing. Combined with other elements of Jackson’s fiscal policy as well as downturns in foreign economies, these problems led to the Panic of 1837. A bank run and the subsequent depression tanked the U.S. economy and forced the federal government to begin borrowing again.

Using Keynesian deficient spending the U.S. is able to sell saving bond that are secured by the government and has made the dollar the standard in world currency. The current GOP has no intention of reducing the debt to zero as Jackson did. Their only goal is to cut any spending that will help the common citizen. Grover Norquist famously said, “My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.” That is the autocratic policies of today’s GOP that way the corporations can assume control and the rich will get richer and the rest will live in abject poverty. No longer will the United States be a shining city on the hill, we will just be another corporate autocracy. That is not the America I served in, or the one I want to leave to the next generations.