Funeral for fiscal responsibility

During August in Iceland, they held a “funeral” for the Okjokull glacier, reported to be the first glacier lost to climate change. Mourners in attendance included government officials and environmental activists, who pointed out that, at the current rate of ice loss, all of Iceland’s more than 400 glaciers will be entirely gone in 200 years.

I find the tactic of using a funeral service to highlight the damage caused by perceived governmental incompetence and apathy to be appealing, so I have one of my own to suggest: a memorial to mark the end of fiscal responsibility in Washington. After all, it has recently been reported that the federal budget deficit for 2019 has jumped a whopping 26% to $984.4 billion.

Of course, deficit spending is nothing new, nor is it necessarily harmful. But recent tax and spending policies have taken the budget deficit to extraordinary and unprecedented levels, which clearly demonstrate that fiscal responsibility has been dismissed from any meaningful relevance or concern. Indeed, it has reached a point where a pronouncement of its passing appears entirely in order.

The commencement of its death spiral can be easily traced to the beginning of the 21st century, when fiscal responsibility was experiencing its best health in decades. For four fiscal years, from 1998 to 2001, the nation enjoyed the first budget surpluses in decades, reaching as high as $236 billion in the black for fiscal year 2000. In fact, beginning with the first Clinton budget in 1993, the deficit was reduced every year until the first of the four consecutive surpluses was achieved. This period of fiscal health is all the more remarkable for having come immediately after the deficit had reached, as of that time, its highest point ever —$290 billion — in 1992.

Then came the 2000s, and out the window went the surpluses. In one fiscal year, the last surplus in 2001 of $128 billion was entirely wiped out and replaced with a $158 billion deficit. Since then, the march of financial irresponsibility has been inexorable. By the last year of the Bush presidency in 2008, the deficit had reached $459 billion, obliterating the record for the highest deficit in history.

This coincided with the worst economic collapse since the Great Depression, and the resulting recession, banking crisis and bailouts. The Obama administration introduced the stimulus package and tax cuts that pushed the deficit to an astonishing $1.3 trillion by fiscal year 2011. Thereafter, with President Obama’s creation of the SimpsonBowles Commission on fiscal responsibility, spending control showed signs of life, with the deficit shrinking down to $438 billion in fiscal year 2015. However, the central commission recommendations went nowhere, and the deficit soared to $779 billion by 2018. With it now again approaching $1 trillion, that is enough for meto declare that the patient is in extremely critical condition if not actually expired.

One reason to remain pessimistic that the fiscal responsibility will ever again be seen alive in Washington is the current state of political fundraising and its effect on policy. In the Citizens United case, the Supreme Court struck down the McCainFeingold Act, which had limited corporate and union spending for advertising relating to a specific candidate. In a 5-4 decision, the court held that the First Amendment right of free speech protects political spending by such entities. The result has been an unprecedented flood of money into politics, including spending by tax exempt organizations that do not have to disclose their donors’ identities as well as so-called super PACs — political action committees that used to be limited to $5,000 per person contributions, but now enjoy essentially unlimited spending. A system that makes elected officials beholden to such financially powerful influences is not likely to produce governments determined to exercise fiscal restraint. On the contrary, all of those wealthy contributors want something, and that is not a recipe for an agenda focused on the best interests of the nation as a whole. Rather, it promotes government subservient to the interests of some.

So, as we again flirt with a $1 trillion deficit, I think that the commencement of funeral arrangements is in order. Perhaps a ’90s soundtrack for the music would be appropriate.