US president Joe Biden’s $6 trillion budget proposal will take the public debt to its highest ever level, and so it must be debated thoroughly by Congress. Unfortunately, many of those well-positioned to scrutinize the plan have already surrendered their credibility in discussing fiscal matters. Yet, it is future generations who will bear the cost.
America’s political elite present themselves as falling into one of two camps: fiscal doves and fiscal hawks. A more accurate description is fiscal doves and fiscal hypocrites.
The doves support big government and tolerate budget deficits because they are confident that effective government spending will grow the economy. They are the masterminds behind Biden’s proposal.
Doves want the US to lead the way in green investments, and they also back infrastructure spending as they feel that underinvestment in this area has been stunting the US economy. Doves also think that taxes on the rich are morally justifiable and do not hurt economic growth.
The fiscal hypocrites are more ambivalent toward big government than are doves, but still don’t mind deficits when they control the budget. This is because the hypocrites like to spend on themselves and their constituents, possibly through the waging of horrific wars. Their political myopia renders them unconcerned by the prospect of future generations footing the bill for such fiscal imprudence.
However, when fiscal hypocrites are out of office, they transform into rhetorical hawks: they brandish their Ronald Raegan tattoos and distribute copies of Adam Smith’s The Wealth of Nations.
While budget deficits caused by military aggression remain laudable, shortfalls caused by welfare spending are an affront to the constitution. One consistent position for whoever is in power is that taxes on the rich cripple the economy, hurting both rich and poor.
The problem for Americans is that fiscal hypocrites have lost all credibility from 20 years of egregious duplicity. Public intellectuals were previously willing to join ranks with fiscal hypocrites to articulate well-founded fears about the impact of rising public debt. However, today, the fiscal hypocrites have become so deceitful that scholars risk tarnishing themselves by joining a hypocrite-led political coalition.
Consequently, no legislatively powerful group can push back against Congress-controlling fiscal doves. Formerly, some doves would have been open to intellectually sound arguments against big government, such as the potential inefficiency of government spending, the possibility of a bloated public sector impeding private enterprise, or the risk of deficit-induced price inflation. After all, in 1996, the centrist US president Bill Clinton famously declared that “the era of big government is over.”
But today, there are no credible peers left to challenge the doves’ orthodox views. The hypocrites have themselves to blame, having failed to heed the lessons a child can draw from a cursory reading of Aesop’s fables, such as the boy who cried wolf.
Authentic hawks remain active as an intellectual force, but they have been completely expunged from elite political circles, being replaced by imprudent fiscal hypocrites. That leaves two future scenarios for Americans.
The good scenario is that the doves are correct, and the economy prospers. In that case, the hawks might reconsider their views, while everyone will continue to ignore the fiscal hypocrites.
The bad scenario is that the doves are wrong, and the economy tanks. In that case, the US has to go through years of economic pain until a new generation of hawks enters the political elite and fixes the problems.
While I sincerely hope that a good scenario emerges, I regard the latter as more likely. I worry about the retirement savings I have invested in the US, and about the health of the world’s most pivotal and influential economy, which will affect my children’s future. And while being angry at doves is the easy option, they deserve minimal blame because they are at least presenting their views in good faith. Some may be economically illiterate, but they respond to reason, and so a sustained effort can bear fruit.
Instead, my ire will be reserved for the fiscal hypocrites, who have destroyed people’s ability to constructively debate government spending due to a short-sighted effort to secure power. Perhaps one tax that fiscal doves and hawks can agree on would be a levy on hypocrisy – the most satisfying way to balance the budget.