Thursday, November 6, 2014

Confessions of a former fiscal conservative

Yes, I used to be so proud of the elevated moral ground I stood on when proclaiming my fiscal conservatism. I mean what can be more right than making "hard decisions" to "get our house in order", right? 

Yeah, I knew that meant the most vulnerable will probably feel the pinch the worst, but I had worked hard and it paid off for me - why couldn't they just do the same?  Ugh!

So why do I say "former" fiscal conservative?

It's quite simple, really. The fatally flawed premise of fiscal conservatism is that the federal government is like a business (or household if you prefer). That is, it earns revenues and has expenses, and like all of us, it has to balance it's check book or it will get in trouble. Yep - I did say fatally flawed. It's complete nonsense - and we all know it if we just sit and think for a moment about what it means to have a legal money printing press. 

A currency-issuing sovereign nation is nothing like a business. It operates on a completely different fiscal paradigm. It has been granted monopoly control of a national monetary system that provides the ability to create spending power out of thin air whenever directed to do so for the common good. What business or household has this power? None!

How did we come to forget this? It would be funny if it weren't so tragic.

What we think of as fiscal conservatism is, in reality, nothing less than the reckless waste of valuable resources. We fail to maintain and enhance critical infrastructure that powers our economy and serves our peoples needs; we abandon large portions of our population to live on welfare, refusing to employ and educate them so that they could enhance their own lives and those of others in the community; we let capital and businesses sit idle when they could be put to productive use; we lay off scientists and close labs that could be inventing the next medical or technological breakthrough.

This is the height of fiscal irresponsibility. There's no moral high ground here - only a web of misinformation and folly that has entrapped western civilization in a cycle of impoverishment and inequality. 

Real fiscal conservatism in a nutshell is this: utilize fiscal policy to whatever measure is necessary to ensure that the private sector is fully employed. 

Period. No irrelevant squabbles over debt-to-GDP ratios and arbitrary debt ceilings. No meaningless metaphors of deficit black holes, drunken sailors, or per-capita debt burdens on our descendants. No hysteria over imaginary fears of hyperinflation. It's all irrelevant.

We can and we should debate all the other government investments, programs & benefits on their merits, but never on the question of affordability or with arbitrary limits based on annual tax receipts.  

So take it from a former fiscal conservative: if you want to balance taxes and government spending with zero regard for the impact that has on the economy, employment, and the lives of citizens, you are neither conservative nor fiscally responsible. Rather, you are harming the economy, people's lives, and contributing to the destruction of capitalism. 

Let's redefine REAL fiscal conservatism, and return our economy to full capacity. And any time you see someone talking about balancing the federal budget, please kindly educate them about how a sovereign currency works!