I enjoyed the meeting on Tuesday night, it's always nice to hang out with like minded people. As conservatives, we must also be ready to engage those who disagree with our philosophy. A friendly, educated liberal dropped by my personal blog and asked some very good questions about my sequester article. I thought these questions got down to the heart of conservative thought, so I thought I'd share the exchange with you.
See the whole conversation here: http://thearchaicconservative.com/
I appreciate your thoughts on the issue. I hope you'll stop by and offer your counterpoints again, debate is a good thing. I'll try to answer all of your questions, if only briefly.
Q-----"If our economic and national security is going to be put at risk by these cuts, how can you support them?"------
I should have made it clear that I did not support these cuts. The President called them "dumb," and I'm inclined to agree. The sequester was so dumb, that it was supposed to spur Congress into doing something about our ballooning debt. I support cuts in federal spending. With trillion dollar plus annual deficits, it's plain to see that this 85 billion doesn't even touch 10 percent of the problem. If federal spending cuts have to be made, though, the question is where? Most of my liberal friends have been arguing for years that defense is where the cuts should be made, while I ramble on about entitlement reform and government waste.
The President out maneuvered Republicans in January to get 150 billion dollars in tax hikes, almost twice the amount of the sequester. He used the sequester as a bargaining chip to get more tax hikes out of House Republicans, and they called him on it. The truth is that we need federal spending cuts across the board, including defense. Leaving entitlements basically off the table, while taking an axe to our defense budget, reeks of pure politics. The fact that the biggest drivers of our debt remain virtually untouched, makes this whole thing an obvious piece of political theater.
Q------"Something I hear a lot from conservatives is that cutting the deficit will lead to economic growth. I want to know how that works."------
When you borrow, you pay interest on the return. As our debt grows, a growing percentage of GDP goes to servicing the interest on our debt. This is the same principle that gets you or I into financial trouble at home. Until we begin reducing the principle, we're on the hook paying interest to the lenders indefinitely. In essence, we've become slaves to our debt. The Moody's downgrade of our credit rating makes it more expensive to borrow, this is a downward spiral that will continue until we prove our ability to get control of our deficits. Data here can be tricky to interpret, especially taking inflation into account. Printing money to buy back our debt is an accounting trick, and will devalue the dollar. When the dollars in your pocket have less purchasing power, it's the same as having your taxes raised.
There are two solutions to this problem; pay down the debt, or drastically increase revenue. Raising taxes on anyone inhibits economic growth.
Q------"I’m not sure how cuts to government spending during periods of anemic private-sector growth and high unemployment will stimulate the economy."------
We've had four years in a row of trillion dollar plus deficits; at almost 8 percent unemployment, and sequestration in affect, we simply haven't gotten the return on our investment that we were promised. This leads us to one of two conclusions; either the federal government completely mismanages the revenue it takes in, or the Keynesian economic model is a failure.....I'll let you choose.
Since, in our capitalist economy, the federal government makes its money through revenue collection (taxation); cutting government spending would return that money to the free market, back into all our pockets. That means more money for businesses to create jobs and invest in capital, and more money for you and I to purchase goods and services. This is a recipe for economic growth, and economic growth is its own jobs program.
Now, in all fairness, Republicans do bear some responsibility for the growth of government over the years. I oppose big "R" government, as well as big "D" government. To hear the President, however, try to lay blame entirely on the Republican Party is both patently absurd, and overtly political. The President who doubled our debt in his first term, should not be pointing fingers during the fallout.
I hope this answers some of your questions, Mike. I apologize for taking this long to respond.