Fiscal Restraint, Yes — But Let’s Not Forget Growth
Debra J. Saunders is right to worry about the party of limited government’s emerging hypocrisy on spending. But before we join her in concluding that it’s time for “the Republicans’ turn at bad one-party rule,” let’s not forget that all deficits aren’t created equal. Let me explain. (RELATED: Republicans Control It All — And Still No Fiscal Restraint)
I agree with Saunders that, with control of Congress, the GOP should be doing more than just complaining about federal spending. It’s time to curb it. The cuts can — and should — run deep.
But in a recent episode of The Civitas Podcast, economic strategist and Reagan administration alumnus David P. Goldman reminded me of a fundamental principle of supply-side economics: deficits resulting from tax cuts aren’t inherently irresponsible. In fact, they can be a calculated and strategic risk — especially if the goal is long-term economic growth.
At least as I understand him, Goldman does not support runaway spending. Nor would he argue that Republican voting patterns have been consistent expressions of sound fiscal judgment. (They haven’t.) But Goldman’s contribution serves as a crucial counterweight to the reflexive calls for austerity.
Consider the Reagan years. Often held up as a golden age for fiscal conservatives, the Reagan years were chock-full of deficit spending. The 1981 tax cuts exploded the deficit in the short term, but they thereafter unleashed a surge of economic growth that not only helped win the Cold War but solidified American economic dominance for decades.
The premise is simple enough: when individuals and businesses keep more of their money, they invest more and spend more. The government ultimately collects more tax revenue, too. The rule proves true outside of Washington, too. Flourishing red states, like my native Oklahoma, understand this. As my former boss likes to put it, tax cuts encourage investment and foster job creation. (RELATED: Keeping the Tax Cuts and Rebooting the Tax Code)
That said, significant tax cuts require discipline elsewhere. Tax cuts without flat (or shrinking!) budgets won’t do the trick. So, Saunders is right to harp on the GOP’s ostensible lack of resolve to tackle the massive, unfunded entitlement programs that are driving long-term debt.
But Saunders writes as though the Republicans have completely abandoned any pretense of fiscal responsibility. That’s an overstatement. The reality, as is often the case, is far more complex. Voters of all stripes don’t really want their benefits touched. Defense spending remains popular on both sides of the aisle. And the political risk of big cuts to popular programs like Medicaid is real.
Again, I don’t hear Goldman and those aligned with him suggesting that conservatives should stop caring about the debt. We shouldn’t. But it does mean we should be careful in how we interpret — and judge — it. If deficits temporarily grow because the economy is being primed for expansion, then it’s fair to say that Republicans are still operating within a vision of responsible conservatism — just not the version that fits neatly onto a bumper sticker.
And in the meantime, consider the possibility that temporary deficits in the service of growth are not the same as structural deficits built on dependency.
That said, I’ve been around long enough to understand that fears like Saunders’s are grounded in decades of broken promises and consistently bloated budgets, regardless of who’s in power. But as I see it, if sitting Republicans are guilty of anything, it’s not hypocrisy — it’s failing to explain the long game. I’m not an economist, but Goldman does it better in 15 minutes than most GOP leaders do in an entire campaign cycle. So, check out the podcast.
And — contra Saunders — the impulse to caricature all deficit spending as some kind of morally debased deontological principle misses what supply-side Republicans, including President Trump, are trying to achieve.
In a word, it’s risky, but not objectively wrong, for conservatives to prioritize growth and restraint. What say you?
Grayson P. Walker is an attorney, former chief of staff to Oklahoma Governor J. Kevin Stitt, and a ruling elder in the Presbyterian Church in America. He has written for the Gospel Coalition, Front Porch Republic, Public Discourse, and American Reformer.
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