Fiscal Responsibility vs. Fiscal Conservatism

[progressive85]

The idea of spending money you don't have is ridiculous.  The services we pay for cost so much money that a tax cut is never affordable.  There isn't enough money to pay for everything, have a reserve fund for emergencies, and pay off all of the debt.

The smart thing to do seems to absorb extra wealth and excess profits that are made and use those to pay for services.  There should be enough money to give to the states, who always seem to be broke, and also to lower property taxes.

I get that the rich, Wall Street, elites, corporations own the government because they are the donor class so they usually get their way - which are policies that give them more money - but doing what they want isn't good for the country as a whole.

The fiscally responsible decisions are the George H.W. Bush and Bill Clinton tax increases which they both paid for (Bush lost re-election and Clinton lost Congress), but as unpopular as they were with some people, those decisions were the right ones to make and got us on a pathway to better fiscal order.

Then the son put in those tax cuts, the wars cost money, we spent it all on credit, no tax increases, and the Great Recession dug us into a deeper hole, and a conservative movement has taken over the country since, proposing even more tax cuts and digging an even deeper hole of debt for their kids and grandkids to pay off.

I also assign some blame to the Great Society which added new services that were going to be hard to pay for plus the "guns" in the guns and butter, the Vietnam War, and the over-the-top defense spending.  Reagan put in the tax cuts in 1981, but these caused a recession and they were rescinded (people always forget that they passed another law which cut back on the very aggressive tax cuts from 1981).

From an economic perspective- if you are a conservative who strongly supports free market capitalism- all of this seems absurd.  Isn't the purpose of being a conservative is to be responsible with money?  The fetish for tax cuts and the over the top greed and credit spending seems to have overtaken any reasonable, rational thinking.

I think sadly what's going to happen is all of this catches up to us one day and we have a depression.

[Southern Senator North Carolina Yankee]

The Reagan tax cuts did not cause the 1981-1982 recession, that recession was caused by the Federal Reserve. The combination of high interest rates to squelch inflation, followed by supply side economics is what ended the stagflation of the 1970's. But you are right, Reagan did raise taxes at points. But because the economy recovered so well under Reagan, Republicans came to think it was the magic elixir for any and all economic problems. The difference now is that the misery index isn't inflation combined with unemployment, it is underemployment combined with not getting a raise in 15 years.

Post Reagan, you had the combination of Bush 41 raising taxes and then losing - this attached the sense of electoral failure to the idea of raising taxes and fed the notion of "we lost because we weren't conservative enough". After that you had Grover Norquist running around with his no tax hike pledge and forcing all Republicans to get in line or get out. The man is a purist, and he idolizes Lenin's success at forcing ideological purity. Those two are why Republicans will never consent to a tax hike now, because they have 30 years of an in grained sense that doing so will lead to defeat. Of course all the special interests back him up on that pledge.

Finally, as a political matter, the art of giving people money is the easiest way to get elected. Republicans can thus derive the same political benefit that Democrats do with entitlements and do so in the name of "shrinking gov't" and "giving your money back to you". Since the 1930's, the Republicans have been organized on the principle of opposing or at least being resistant two the expansion of gov't under the New Deal and then the Great Society. There had always been a Jeffersonian small gov't wing (often with a Jacksonian FP view) in the GOP, but the parties were not composed based on ideology, but on religious, ethnic and geographic tribalism. The only thing that unified the whole of the GOP was the support for Protectionism and legacy support for the unionist side of the Civil War, which was very powerful until those veterans and contemporaries died off. The political heirs to the Whigs and the Federalists, lets call them "economic nationalists", would have been of a mind to use the tariff revenue to invest in infrastructure. While the heirs to Jefferson and Jackson, "the small gov't wing", within the party would have been of a mind to use it to pay down the debt, or after 1913, us it to lower income taxes and reduce the debt.

Because of the events of the 1910's and 1920's, the small government wing ended up holding the dominant hand in the party going into the Depression, and Protectionism was thoroughly discredited so the previous unifying force was now a dead issue for the most part.  the Depression further strengthened their dominance because small gov't Democrats began to shift over to the Republicans, creating a realignment on the basis of how you view gov't. But because of the generational dynamics and because of the political power of the New Deal and Great Society Programs, the Republicans were always at a disadvantage. Beginning with the 1980's, tax cuts were a genius way to get people invested in decreasing the size of gov't, which they wouldn't be on board with otherwise.

So now the GOP find itself once again with a single unifying principle, tax cuts.

[progressive85]

, and tax cuts are a way to "starve the beast", that is, destroy liberal social programs by depriving them of funding.  It's sabotage disguised as giving the people back their money.  So a liberal government expands services and a conservative government takes away the money since its very hard to take away the services, but they have to keep paying for them anyway, so there's a combination of tax cuts and deficit spending. 

Conservatives never really got to dismantle Social Security and Medicare.  They pick fights with little things like arts funding, but they never succeed in eliminating Social Security and Medicare.  And then of course they run up high bills for more military industrial complex spending, which always passes because they are touted as security measures even if they are excessive.

[Lechasseur]

The idea of spending money you don't have is ridiculous.  The services we pay for cost so much money that a tax cut is never affordable.  There isn't enough money to pay for everything, have a reserve fund for emergencies, and pay off all of the debt.

The smart thing to do seems to absorb extra wealth and excess profits that are made and use those to pay for services.  There should be enough money to give to the states, who always seem to be broke, and also to lower property taxes.

I get that the rich, Wall Street, elites, corporations own the government because they are the donor class so they usually get their way - which are policies that give them more money - but doing what they want isn't good for the country as a whole.

The fiscally responsible decisions are the George H.W. Bush and Bill Clinton tax increases which they both paid for (Bush lost re-election and Clinton lost Congress), but as unpopular as they were with some people, those decisions were the right ones to make and got us on a pathway to better fiscal order.

Then the son put in those tax cuts, the wars cost money, we spent it all on credit, no tax increases, and the Great Recession dug us into a deeper hole, and a conservative movement has taken over the country since, proposing even more tax cuts and digging an even deeper hole of debt for their kids and grandkids to pay off.

I also assign some blame to the Great Society which added new services that were going to be hard to pay for plus the "guns" in the guns and butter, the Vietnam War, and the over-the-top defense spending.  Reagan put in the tax cuts in 1981, but these caused a recession and they were rescinded (people always forget that they passed another law which cut back on the very aggressive tax cuts from 1981).

From an economic perspective- if you are a conservative who strongly supports free market capitalism- all of this seems absurd.  Isn't the purpose of being a conservative is to be responsible with money?  The fetish for tax cuts and the over the top greed and credit spending seems to have overtaken any reasonable, rational thinking.

I think sadly what's going to happen is all of this catches up to us one day and we have a depression.

Agreed

[Maverick J-Mac]

The idea of spending money you don't have is ridiculous.  The services we pay for cost so much money that a tax cut is never affordable.  There isn't enough money to pay for everything, have a reserve fund for emergencies, and pay off all of the debt.

The smart thing to do seems to absorb extra wealth and excess profits that are made and use those to pay for services.  There should be enough money to give to the states, who always seem to be broke, and also to lower property taxes.

I get that the rich, Wall Street, elites, corporations own the government because they are the donor class so they usually get their way - which are policies that give them more money - but doing what they want isn't good for the country as a whole.

The fiscally responsible decisions are the George H.W. Bush and Bill Clinton tax increases which they both paid for (Bush lost re-election and Clinton lost Congress), but as unpopular as they were with some people, those decisions were the right ones to make and got us on a pathway to better fiscal order.

Then the son put in those tax cuts, the wars cost money, we spent it all on credit, no tax increases, and the Great Recession dug us into a deeper hole, and a conservative movement has taken over the country since, proposing even more tax cuts and digging an even deeper hole of debt for their kids and grandkids to pay off.

I also assign some blame to the Great Society which added new services that were going to be hard to pay for plus the "guns" in the guns and butter, the Vietnam War, and the over-the-top defense spending.  Reagan put in the tax cuts in 1981, but these caused a recession and they were rescinded (people always forget that they passed another law which cut back on the very aggressive tax cuts from 1981).

From an economic perspective- if you are a conservative who strongly supports free market capitalism- all of this seems absurd.  Isn't the purpose of being a conservative is to be responsible with money?  The fetish for tax cuts and the over the top greed and credit spending seems to have overtaken any reasonable, rational thinking.

I think sadly what's going to happen is all of this catches up to us one day and we have a depression.

That's very opinionated and wrong.  It wasn't higher taxes, but the Gramm–Rudman–Hollings Balanced Budget and Emergency Deficit Control Act of 1985 and the Balanced Budget and Emergency Deficit Control Reaffirmation Act of 1987 which reformed congressional spending.  Over time spending slowed and the economy grew stronger on its own creating a surplus not even a decade later.  You're welcome to look into it.  I know many of you under the age of 40 probably never heard of it and were taught by the teachers' unions that higher taxes are somehow good for the economy.  You can't tax yourself to prosperity.