Escape from reality
The laws of economics seem to have suddenly vanished, in tandem with any constituency in favor of fiscal responsibility.
This doesn’t mean that the hard realities of economics have ceased to exist, or that fiscal irresponsibility will have ceased to have negative consequences, only that we don’t talk much any more about the former and pretend the latter can’t possibly be true.
It is the age of Santa Claus, the Tooth Fairy, and money that grows on trees. Only the Debbie
Downers among us want to express reservations about a nearly
$2 trillion “stimulus” bill that is
“wildly popular” in the same way boondoggles that include lots of free goodies (that aren’t really free) tend to be.
An adoring media paints the Biden administration’s spending blowout as a giant political “victory” that Republicans will pay a dear price at the polls for having resisted (although, more accurately, they, in their typical, cowardly fashion, supported a smaller one with fewer goodies, thereby surrendering on principle).
The hunch is, though, that historians a few decades from now who seek to explain the smoldering wreck of the American economy and the precipitous decline of American status and power in the world flowing from that wreckage might hone in on March 11, the day Biden signed his monstrosity into law while blithely failing to notice (or, more likely, noticing but not caring), that we are already experiencing the highest fiscal deficit in our nation’s history and that the national debt has already shot way beyond our gross domestic product.
Some might be inspired to dust off their copies of Paul Kennedy’s (alas, temporarily) popular 1987 tome, “The Rise and Fall of the Great Powers,” with its attendant thesis that fiscal insolvency (in particular deficit spending) produced impoverishment and great power decline throughout history.
Granted, Americans don’t know as much about history, even their own, as they used to, but it is striking that there was once a time when you could actually be successful in American politics by promising to be fiscally responsible; that balancing budgets, or at least promising to, was a ballot-box winner, to the point of being vaguely obligatory.
Calvin Coolidge obsessed over government spending to the point of ordering federal workers to use their pencils down to their nubs and was the last president to leave behind a federal government that spent less than the one he inherited. He also nearly doubled the popular-vote total of his Democratic rival while winning 382 electoral votes in 1924.
Dwight Eisenhower, confronted with a national debt that had been driven up by the war he did so much to help win, continually warned of the dangers of fiscal insolvency, received 457 electoral votes in his 1956 re-election bid, and left office with a balanced budget largely by cutting spending for the Army he once led (military spending representing roughly half of all federal spending at the time).
Lest these be dismissed as ancient history, we might recall a third-party candidate with Dumbo ears and a Texas drawl who made a splash with infomercials, pointer and poster-boards warning about a federal debt that was less than one-seventh then (1992) what it is now.
The fellow Ross Perot helped make president (by allegedly siphoning off votes from incumbent George H.W. Bush), Bill Clinton, would leave office with four consecutive budget surpluses and, despite the Monica Lewinsky unpleasantness, the highest Gallup approval rating of any post-war occupant of the Oval Office.
In short, just about every president up into the present century at least promised to be fiscally responsible, and at least appeared to believe that both political and financial peril flowed from not being so.
Republicans might have been the “green eyeshade” party, but even Democrats were sufficiently afraid of being labeled the “tax and spend” party that they had to at least occasionally (as during the Carter and Clinton years) temper the taxing and spending.
Once the game of buying votes with other voters’ money starts to be played, it is hard to prevent it from getting out of hand. Politicians acquire more incentives to constantly promise more, more people become used to getting more generous government checks, and those trying to hold the line grow tired of being the skunks at the picnic.
When no credit and only scorn go to those who fret over spending money, we don’t have the incentives for fretting over inevitable decline.
The interesting part of the debate over raising the minimum wage arrives when supporters of $15 per hour balk at $30 or $40, thereby implicitly acknowledging that at some point the cost-benefit relationship shifts in favor of the former, thereby leaving them to explain why
$15 somehow can’t be it.
Perhaps, in a similar sense, we can ask those most enthusiastic about Biden’s stimulus bill (who tend to be the same folks who want that $15 minimum wage) why they are being so stingy.
If it’s all so wonderful, and there is no downside at all to the endless borrowing, if deficits and debt for some reason no longer matter, why stop borrowing at just $2 trillion?
Why not “think big” and make everyone rich with $30 trillion or
$40 trillion instead?