Deficit Hawk Down
All over the country, I’ve seen it the same,
Nobody’s winning at this kind of game.
We gotta do better, it’s time to begin.
You know all the answers must come from within.
Free Ride – Edgar Winter Group
…..
I have always been a deficit hawk. Fiscal conservatism was a defining element of my reputation as a politician.
It has been a lonely place to stand recently.
Fiscal conservatism probably reached its nadir in recent times during the Newt Gingrich years in the second half of the 90s, after Bill Clinton declared “the era of big government is over” and the federal government briefly ran an annual surplus. Deficits ballooned again after 9/11 with spending on the war on terror. During my days in Congress (2005-2015) we had a few victories with the elimination of earmarks and some focus on deficit reduction. The TARP program launched in 2008 during the financial crisis actually, ended up making money for the federal government as most of it was not spending but loans and loan guarantees that were repaid with interest.
Since the advent of the Trump administration however, fiscal conservatism has been in remission. Mr. Trump has always been a fan of indebtedness both in his personal life as well as during his presidency. You may recall for a time that then President Trump even advocated for negative interest rates in the U.S. (a horrible idea by the way). Concern about deficits was always rare amongst Democrats. Then, with the leading Republican (Trump) unconcerned about them, the Deficit Hawks were indeed down.
Along came the Chinese Virus, the lockdowns and the additional spending to forestall economic collapse from shutting down economic activity. Follow that with a Biden Regime devoted to the newly invented economic theory called Modern Monetary Theory (MMT). The left is always so clever the way they name things. They use the term “modern” here to give the impression that it is new and improved from prior economic thought. MMT is new. It is in no way improved. Like Climate Change, it is an invented construct to justify policy actions the left wants to take which would otherwise have no basis for wide support. MMT basically says that endless amounts of money can be spent and paid for with debt or currency printing and there will be only good outcomes from doing so.
Deficit Hawks down further.
Unlike leftists, I believe we conservatives should always be testing our policies and positions to see if they might be wrong, failing, or not achieving the desired results. I have often had the case of Japan pointed out to me as an example of a modern economic power with a large national debt that has not imploded or otherwise faced financial disaster. Japan is instructive, but for various reasons too wonky to explain here, I believe that Japan’s situation is different enough from the U.S. to not be fully comparable.
So, look at where we are now with deficits and debt as a percentage of GDP or by any other measure. They are at record levels. Add to that a balance sheet of the federal reserve, which basically represents money that has been printed out of thin air, that stands so far above any historical comparison that it constitutes “new territory”. All these deficits, and money printing are giving us the inflation we are now experiencing. The massive debt load creates such a huge cost to the government if rates are raised, that it stands in the way of rates being raised to where they would need to be to control the inflation. “Stagflation” is a term now appearing more frequently in financial print. If we are heading in that direction, it means a flat or declining economy with high inflation and little the government can do to fix things without bringing on a severe downturn and handicapping the federal budget. In other words, trouble ahead with no apparent painless solution.
Rise up Deficit Hawks! It is time to awaken from the slumber of recent years. Money printing and deficit spending are not unlike drug addiction. They feel good when you take them. But they will ruin your life and getting off them is very painful. As the economic problems that the excesses of recent years have caused become evident, it is time for us to start talking again about returning to fiscal prudence and sanity. It will be a long road back, but we have to start somewhere.
When I was first elected to Congress, over 90% of the requested meetings I had in my first few months in office were from groups wanting me to get them some free government money. I felt like a federal ATM. At this point I realized that every dollar of federal spending had many special interest advocates who benefit from that spending. Reducing the deficit had no special interest support. But, it was in the interest of the population as a whole.
The failings of MMT, endless debt and money printing are becoming apparent. I am a proud deficit hawk. We shall fly again.
I remain respectfully,
Congressman John Campbell
Drive fast & live free