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Consider the following attitudes:

  1. For balanced budgets, and against deficits.
  2. For smaller government, meaning lower taxes and lower government spending.
  3. For reducing the percentage of the tax burden placed on the wealthy.
  4. For government spending that has a demonstrable return on investment, against wasteful spending that does not.

These all can be associated with fiscal conservatism.  Yet they’re largely independent positions–policy changes can be evaluated separately along each criteria.

The fourth position seems to be the gaining considerable steam: eliminating earmarks, for instance, has little effect on the first three, but definitely satisfies the fourth.  It’s also the least controversial of the four, the one most likely to find support across the political spectrum.


  1. It’s misleading to use the word “wasteful” as the opposite of “has a demonstrable return on investment” in your fourth point. Not all govt spending that doesn’t have a demonstrable return on investment is wasteful (Medicare, or the Washington Monument, for some examples). These have value that probably wouldn’t be considered an ROI, and definitely not a “demonstrable” ROI. Even if you were to argue that we lose money on it (you can make a case either way), most people would have trouble calling Medicare and the Washington Monument “wasteful.”

    I am critical of all these points, including number 4. Even if you want to run America like a business, plenty of private businesses invest in things that don’t have a clear ROI: they expect these investments have value, but can’t quantify it. Advertising is the obvious one, but also recruiting, elements of IT, office parties, etc.

    Last, earmarks, by definition, don’t necessarily lack a demonstrable ROI. Usually we think of bridges to nowhere when we think of earmarks, but they can also be bridges to somewhere, right? Or do we assume that bridges to somewhere can be taken care of at state/local governments? (this is not a rhetorical question; I really don’t know).

  2. Joe,

    On your first point, I think our differences are purely semantic. If I change “demonstrable ROI” to “passes a cost-benefit analysis”, would you agree it’s the opposite of wasteful? Of course, within the context of cost-benefit analysis, there’s much room for disagreement, by assigning different values to costs and benefits; but it seems pretty uncontroversial that some government spending creates value and should be continued/implemented, while other government spending is wasteful and should be eliminated.

    On earmarks, there isn’t a 1-1 correlation between earmarks and waste. Earmarks force agencies to allot sums of money to specific projects that are defined by politicians, often either to shore up political support from a special interest group, or simply to funnel taxpayer dollars into their state/district. Of course, without earmarks, agencies still could spend taxpayer money wastefully, but eliminating earmarks seems like a positive change, regardless of one’s political ideology.

  3. What I find interesting me is that (1) could possibly be achieved without needing consensus. Suppose a significant faction of one political party declared that they were opposed to deficit spending, and would, when in power, default on any new borrowing due to future deficits. The markets would have to price in the possibility of such a default so, provided this was a group with a good possibility of taking power, the government would find it impossible to fund a deficit. Moreover, by showing its power in such a way, the political grouping would probably make its own rise to office much more likely, so it would be a doubly self-fulfilling prophecy.

  4. IAN,

    Thanks for commenting, and also for linking to me in your blogroll.

    I think it would be difficult for politicians to commit to defaulting on any given debt. First, politicians aren’t well trusted. Second, in this case they’d be creating a pretty strong incentive for bond-holders to oust them from power.

    However, even without a formal declaration from a political faction, governments’ ability to accrue debt is constrained by bond markets. I see U.S. government bond markets’ strength as a signal that deficit and debt aren’t as big a problem as some might thing; I’ll comment further in a future post.

2 Trackbacks/Pingbacks

  1. By Cost-Benefit Run Amok « Contrarian Moderate on 03 Dec 2010 at 3:39 pm

    […] Contrarian Moderate Thinking Politics About « Framing Fiscal Conservatism […]

  2. […] from my breakdown of fiscal conservatism into four separate positions, I’ll explore and evaluate the recent tax […]

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