(John Tamny, RealClear Wire) If you’re ever searching for the personification of sanctimonious, find yourself a “balanced budget” proponent. These individuals will tell you in haughty, eyes-periodically-closed fashion about the crisis that awaits us unless we allegedly “get deficits under control.” Balanced budget proponents are morally superior to all of us.
They also completely miss the point. Their self-regarding countenance obscures how little they understand markets, and worse, how little they understand the true horrors of the horrid, economy-and-freedom sapping tax that is too much government revenue.
Totally lost on those who clamor for “budgetary balance” is why they’re able to yearn for that which is pointless in the first place. Balanced budget advocacy is plainly a consequence of government debt, but missed by those who loathe government debt is why there’s a market for it in the first place.
This ignorance speaks to folly of deficit “hawkery.” You see, not all countries can run up debt. Realistically most can’t. Which is the point, or should be the point for those interested in understanding the real problem of deficits. It’s not the deficits. What country debt signals is too much government revenue now, and worse, the expectation of much more government revenue in the future. Get it?
If not, readers have to remember that government debt is a claim on future government revenues. Applied to the U.S., that Treasury can borrow so much is a market signal yet again of Congress having WAY too big of a claim on the taxable fruits of our current work, and a similar claim on our much more fruitful work that lies ahead. In other words, if you’re a deficit hawk you’re the budgetary policy equivalent of the person in the football stadium yelling at the scoreboard for signaling what’s happening on the field. You’re yelling at symptoms, not causes. Yes, deficit scolds miss the point.
All of which explains why “deficit hawks” rate so much of our bemusement, and perhaps scorn. Rather than yelling at scoreboards, they’re wailing endlessly about the nature of America’s second oldest profession. Really, what are they going to do with gushers of revenue? And if you think they’re going to give it back, go back to school. Not for economics classes, but for liberal arts crash courses on why people do things. Translated, as long as revenues flow to government Treasuries, there will be rather deep markets for the debt of those countries.
Of course, the deficit self-serious don’t stop there. Having failed to grasp the why behind government debt, they declare in even more sanctimonious fashion (eyes fully closed, surely) that “we’re burdening the grandchildren” with the debt. Supposedly this is “immoral.” Such a view firstly implies that we somehow gain in the present from the waste of individuals with names like Schumer, McConnell, McCarthy and Pelosi. Which firstly means the viewpoint is much less than serious.
Second, the balanced budget religion that informs what firstly vandalizes common sense yet again ignores why we have budget deficits to begin with: enormous tax revenue that makes obnoxious, extra-constitutional spending and borrowing possible to begin with. Translated for those who need it, the burden on the grandchildren isn’t the deficits, rather it’s too much government revenue that makes horrid spending possible in concert with endless moaning about debt. The debt isn’t the problem, rather it’s a consequence. The only way to reduce debt is to greatly reduce the inflow of dollars to the U.S. Treasury. Lots of luck there.
In other words, the fact that the self-serious can talk rather mindlessly about balanced budgets speaks to the real problem that truly burdens the grandchildren: too much government revenue that doesn’t fund real, private sector progress now, and which thus burdens the grandkids with more problems to solve in the future. Yes, if you’re talking about balanced budgets you’re completely missing the point.