There’s Nothing Conservative about Deficits and Debt

Republicans are marching towards a high-stakes November election. Alas, they seem to have left some important conservative principles behind. The 2024 GOP Platform is notable for what it omits: its lack of commitment to fiscal responsibility is a major oversight. 

Admittedly, Republican rhetoric has long exceeded Republican policy when it comes to spending restraint. The rhetorical change is meaningful nonetheless. There is a world of difference between falling short of a standard and abandoning it altogether.

The word “debt” does not appear in the platform. “Deficit” does, but only in the context of international trade (“trade deficit”). Aside from a throwaway line about “slashing wasteful Government spending,” there is nothing in the document to suggest Republicans care about fiscal prudence.

Ignoring a problem doesn’t make it go away. Perpetual deficits and ever-growing national debt threaten the economy, increase partisan rancor, and imperil national security. If conservatism is about conserving our founding principles, the GOP’s abandonment of spending restraint is one of the most anti-conservative policy shifts in a generation.

Deficit spending harms economic growth. When spending exceeds tax revenues, Uncle Sam makes up the difference by borrowing. This diverts capital from private markets, where it would have financed investments to increase future productivity. Instead, that capital gets redirected to current consumption. Eating our seedcorn deprives future generations of higher living standards.

There’s another economic problem with deficits: they can spark inflation. When governments spend too much, central banks might feel obliged to run the printing press to ease borrowing conditions. Consequently, the deficits and debt often bring debasement.

Consider the Federal Reserve’s monetary policy response to the pandemic. Our central bank wanted to stabilize the market for government debt. To this end, it bought more than 50 percent of the newly created government debt, and paid for that debt with newly created money. With money growth outpacing the demand to hold it, prices everywhere shot up.

The deficits-debt cycle also makes partisan politics nastier. The percentage of federal expenditures on debt service has sharply increased since the COVID crisis. Furthermore, government borrowing costs are much higher now than they were over the past ten years. Interest payments now suck up more of the federal budget, leaving less to spend on important political priorities. Since Republicans and Democrats disagree about what those priorities are, the resulting fiscal strain amplifies partisan divisions. Politicians must fight harder just to maintain their slice of a shrinking pie.

Finally, excessive debt is a national security threat. We no longer live in a unipolar world. Rival powers such as China, Russia, and Iran are stronger than ever. Armed conflict is a real possibility. The US must be able to ramp up spending on arms rapidly if a conflict breaks out, as it did in the 1940s. That’s feasible for a nation with low debt levels. It becomes more difficult as a nation’s debt-to-GDP rises. Embracing restraint during tranquil times leaves room to expand during turbulent times.

When it comes to government spending, the GOP should return to its roots. Last summer, a group of conservatives committed to America’s historic creed offered a better approach to fiscal matters. These Freedom Conservatives declared that misguided government policies were making “food, shelter, health care, and energy…unaffordable to many Americans.” They also recognized “skyrocketing federal debt…is an existential threat to the future prosperity, liberty, and happiness of Americans.” This is the correct approach to deficits and debt.

Republicans are right to change their platform to address new policy challenges. But they shouldn’t renounce conservative priorities. If they aren’t serious about spending restraint, they aren’t serious about conserving anything.