Fiscal conservatism

Fiscal conservatism is a term used in the United States to refer to economic and political policy that advocates restraint of government taxation, government expenditures and deficits, and government debt, mainly used in reference to certain United States members of Congress. The philosophy originally derived from ideas of economic liberalism, and its modern application is mostly rooted in the concepts of monetarism, as opposed to Keynesian economics.

Main principles

Fiscal conservatism is the economic philosophy of prudence in government spending and debt. Edmund Burke, in his 'Reflections on the Revolution in France', articulated its principles:

...is to the property of the citizen, and not to the demands of the creditor of the state, that the first and original faith of civil society is pledged. The claim of the citizen is prior in time, paramount in title, superior in equity. The fortunes of individuals, whether possessed by acquisition or by descent or in virtue of a participation in the goods of some community, were no part of the creditor's security, expressed or implied...[The public, whether represented by a monarch or by a senate, can pledge nothing but the public estate; and it can have no public estate except in what it derives from a just and proportioned imposition upon the citizens at large.

In other words, a government doesn't have the right to run up large debts and then throw the burden on the taxpayer; the taxpayers' right not to be taxed oppressively takes precedence even over paying back debts a government may have imprudently undertaken.

Fiscal conservatism in the United States

The adoption of fiscal conservatism in the United States began prior to the American Revolution, when Great Britain passed laws to regulate commerce. These laws, such as the Proclamation of 1763, which forbade American colonists to settle west of the Appalachian Mountains, antagonized colonists wishing to profit from farming the fertile Ohio Valley. In 1764, the Parliament passed the Sugar Act, which banned foreign trade. Although this act primarily affected the merchant class, the Stamp Act, the Townshend Acts and the Tea Act imposed direct taxes on the bulk of the American population.

Early United States

The Republican Party of Thomas Jefferson (later called the "Democratic-Republican Party" to distinguish it from the modern Republican Party) supported a weak central government and a more laissez-faire approach than Hamilton's rival party, the Federalists.

Four presidents (Thomas Jefferson, James Madison, James Monroe, John Quincy Adams) were members of the Party, but in the end, the early Republic was influence more by the Federalists, who advocated strong central government and a mix of capitalism and state control to attempt to influence and bolster the economy.

The late 1800s

In the late 1800s, a new fiscal conservative political party emerged, the Republican Party. Unlike the modern fiscal conservatives, these fiscal conservatives were paleoconservative supporters of protectionism and tariffs, similar in some ways to today's Reform Party.

They were also generally supporters of big business and (internally) laissez-faire economics, although by 1890 they had been conviced into supporting Sherman Anti-Trust Act and the Interstate Commerce Commission following massive complaints.

Early 20th century

In the early 1900s, fiscal conservatives were often at odds with progressive President Theodore Roosevelt, particularly for his support of antitrust laws.

During the 1920s, President Calvin Coolidge's pro-business economic policy may be credited for the wildly successful period of economic growth known as the "Roaring Twenties." Coolidge not only lowered taxes, but also reduced the national debt. His actions, however, may have been due more to a sense of federalism than fiscal conservatism: Robert Sobel notes that "Governor of Massachusetts, Coolidge supported wages and hours legislation, opposed child labor, imposed economic controls during World War I, favored safety measures in factories, and even worker representation on corporate boards. Did he support these measures while president? No, because in the 1920s, such matters were considered the responsibilities of state and local governments." [http://www.jfklibrary.org/coolidge_sobel.html

During the Great Depression, Franklin Roosevelt's New Deal was opposed by many conservatives because it expanded the scope of the federal government, regulated the economy, and imposed high taxes.

After the Second World War

Fiscal conservatism after the Second World War can be found by such Democratic Senators from the South, as Harry F. Byrd, his son Harry F. Byrd, Jr., and Walter F. George.

The Reagan Era

Fiscal conservatism reached perhaps its greatest influence the United States during the presidency of Ronald Reagan (1980-1988). During his tenure, Reagan touted economic policies that became known as Reaganomics. Based on the theory of supply-side economics, his policies centered around cutting taxes and deregulating the economy, and stopping inflation by a tight monetary policy. Reagan also favored reducing the size and scope of government (see limited government), proposing a balanced federal budget. Reagan would dramatically increase the defense budget in his efforts to end the Cold War though, but no balanced budget was ever presented, with federal debt only increasing during his presidency.

References

External links

Opinions and editorials

Note: The links in this section are not to be considered as unbiased sources of information, but rather are included for completeness only.

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