Fiscal Conservatism Defined – Part 1

April 24, 2009

George W. Bush and then-Treasury Secretary Henry Paulson engineered the $700 billion corporate welfare program known as TARP, the largest upward transfer of wealth in our nation’s history. GWB presided over the largest expansion of government in our nation’s history since the one over which LBJ presided. This expansion of government included increased federal involvement in education (No Child Left Behind) and health care (growth of Medicare and Medicaid). GWB opened a two-front war, championed the outdated expansion of NATO, increased foreign aid to unprecedented levels (including the most aid ever sent to Africa, even as that continent continues to devolve into a diseased, corrupted, war-torn, terrorist-harboring disaster) and failed to enforce our borders, allowing millions of illegal immigrants to undermine our nation’s workers. Despite record federal tax revenues, GWB signed into law budgets that ran the largest deficits in history (apparently all that spending did not include an allocation for an ink cartridge for George’s veto pen). GWB, at least tacitly, endorsed a cheap money policy that debased the value of the dollar, making it harder for working citizens to save and encouraged further crass and needless consumption. Sadly, the list continues. Predictably, the economy capitulated.

 

Even more predictably, the mainstream media and the useful idiots on the left (namely young Democrats, Hollywood, “academics” and deadbeats drunk on entitlements) “logically” concluded that not only had conservatism failed, but that it was directly responsible for the nation’s current economic mess (if one doesn’t believe this, he or she should read every Thomas Frank column in the Wall Street Journal). Thanks to GWB’s incompetence, conservatism got discredited during an era in which liberalism ran amok (with any luck, President Obama’s apparent incompetence will do the same work discrediting liberalism, though one suspects all of Obama’s failures will be blamed on Dick Cheney and/or Rush Limbaugh; more on that in a future blog).

 

Believe it or not, the purpose of this blog is not to bash GWB (one expects that writers far more talented than this column’s author will write 40-volume encyclopedic odes to his incompetence) because it is obvious to all literate people that Congress, on both sides of the isle, was completely complicit. Complicit as well were the voters who failed to hold congressional RINOs accountable for their profligacy (one could blame Democratic voters as well, but experience indicates that not much is to be expected from Democrats). The purpose herein is to inform Let’s Get Loud of the difficulty of the task ahead (after all, GWB was supposed to be “one of us”). However, the task will be easier if fiscal conservatives can first define fiscal conservatism and then unify the message as they seek to spread it.

 

Begin with the basics. Though this is not news to anyone, fiscal conservatism starts with a belief in low taxes. Taxes on businesses should be drastically lowered or eliminated. As many already know, businesses pass on their taxes in the form of lower dividend payouts to investors, higher prices to customers and fewer jobs/lower wages to workers. In this calculus, the workers bear the brunt of the burden as businesses are loathe to injure investors and alienate customers. In addition, the capital gains tax should be eliminated. If it is not eliminated, it should be indexed for inflation. Not indexing capital gains taxes for inflation allows the federal government to steal wealth through manipulation of the money supply (and manipulate and steal it will). A massive, pro-growth tax cut in the federal marginal income tax rate on earned income would help as well. This blogger endorses scrapping the income tax system in favor of a consumption-based tax system, but is not dogmatic about it. Point being, tax rates and the method of taxation are central to fiscal conservatism.

 

The other side of low taxes is a small federal government and strong states rights. Fiscal conservatives believe that the states are Petri dishes of policy development for the greater republic. States should use policy to compete for talented residents and capital. May the best states prosper and the worst states adjust policy accordingly.

 

Jason Moss

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One Response to “Fiscal Conservatism Defined – Part 1”

  1. Steven Rosenblum said

    Very intelligent and insightful piece. I agree with every point you’ve made.

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