Originally published by USA Today on June 5, 2019.
When President George W. Bush used the national credit card for the Troubled Asset Relief Program bailout, the establishment applauded. When President Barack Obama doubled the national debt for his failed stimulus, Obamacare and other boondoggles, the establishment once again approved.
Now that there’s some much needed tax reform to boost American competitiveness, we’re supposed to suddenly believe that red ink is a national crisis.
What’s ironic about all this pearl clutching is that the 2017 tax bill actually increases revenue beginning in 2027, according to the Joint Committee on Taxation. Too bad we can’t say the same about spending, which routinely imposes much higher costs over time.
This isn’t to say that America’s fiscal house is in good shape, or that President Donald Trump should be immune from criticism. Indeed, the White House should be condemned for repeatedly busting the spending caps as part of bipartisan deals where Republicans get more defense spending, Democrats get more domestic spending and the American people get stuck with the bill.
And let’s not forget that Trump hasn’t lifted a finger on entitlements. That’s fiscal child abuse because we’re going to hand our kids a Greek-style budgetary nightmare.
The real lesson is that red ink is bad, but it’s only the symptom of the real problem of a federal budget that is too big and growing too fast.
If policymakers were serious about fixing America’s finances, they would copy Switzerland and Hong Kong and adopt some sort of constitutional spending cap so that the budget over time doesn’t grow faster than the private sector.
Even researchers at international bureaucracies such as the International Monetary Fund and the Organization for Economic Cooperation and Development have concluded that spending caps are the only effective fiscal rule. But don’t hold your breath waiting for the foxes in Washington to put a padlock on the henhouse.
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Image credit: Martin Jacobsen | CC BY-SA 3.0.
