The return of fiscal watchdog hawks

Not all species of hawks migrate, but among those that do are the Deficit Hawks. Deficit Hawks, like most species of political animals, feed on attention. This season they may find the hunting a little harder.

The last time Deficit Hawks flocked to the capitol was during the Great Recession. They held grave discussions of huge deficits being run up by the stimulus package and made dire warnings of complete economic collapse and runaway inflation. The media — left, right, and center — gave the hawks a lot of attention and not just a few nods of agreement.

Contrary to the hawks’ predictions, the economy recovered very well. If you had $100 in the stock market when Obama took the oath of office, then you would have had $257 eight years later, a stunning 157% return on investment, about 12.5% per year. Unemployment peaked at 10% in 2019 but was down to 4.7% when Obama left office. Far from running away, inflation took a leisurely stroll at about 1.7% per year.

The hawks, who had tried to hold down stimulus spending, later complained that the recovery was not fast enough, but they never publicly connected the dots from stimulus to growth.

Instead, and entirely predictably, they started pitching a tax cut to address a recession that was already in recovery. The right’s new intellectual heart and

“policy wonk,” Paul Ryan, assured us that this time the tax cut would pay for itself, that loopholes would be closed, and that they would rein in government spending. In addition to these promises, then-candidate Trump pledged in 2016 that he would completely wipe out our national debt in eight years.

In 2017 Ryan brought his gavel down in triumph as the House passed the Tax Cuts and Jobs Act and President Trump signed it into law.

Contrary to the hawks’ predictions, deficits rose by $1.7 trillion in two years. Federal spending increased over $1 trillion. The national debt rose $2.5 trillion. 2018 was the first year in a decade that stocks fell. That was all before the pandemic.

Where were the hawks through all of that?

They went wherever they go when a Republican has the White House because the GOP is happy to raise the deficit to achieve whatever its policy objectives really are, it is just that fiscal conservatism has never been one of them. Hence the hawks were absent when Reagan ran national debt up 186%, George H.W. Bush 54% (in four years), and George W. Bush 101%. But while Obama took us from the depths of the Great Recession to the longest economic expansion in U.S. history, creating less relative debt than all three of his Republican predecessors, the hawks were everywhere.

Now the first of the hawks are returning from their four-year migration. Pennsylvania Senator Pat Toomey was quick to express his concern over Biden’s relief proposal. Senator Rick Scott is adamant, all of a sudden, about debt. Stephen Moore used his column to nod to the fact that debt increased substantially under Trump, but made sure to say that this does not make it okay for Biden to do it too. Mitt Romney wants to see what a pared-down stimulus would do for the economy. Janet Yellen, who was ultimately approved by the Senate on an 84-15 vote, still had to take seriously questions from Republican lawmakers about the dangers of deficit spending.

The Deficit Hawks have made it clear that their true purpose is not to cure debt, it is to undermine programs intended to bolster middle- and low-income earners while reducing tax burdens on the wealthiest. In the past we saw the hawks command an amount of time and respect from the media that is wildly disproportionate to the truth, value, and sincerity of what they said.

But this season the hawks are not getting the kind of attention they are usually accorded. Instead, the press is reporting more on the irony of their return than on the content of the hawks’ message. Couching the hawks in terms of their migratory pattern is a major step towards attenuating their false messaging. Presenting a more accurate picture of their intentions and the merits of their arguments means that basic facts and good economic policy will get a fairer hearing than previously, and the more informed our electorate is, the better our electorate is.

Will Wood