What’s the bigger generational burden: small amounts of annual borrowing to pay for small governmental overages in a nation full of 20 percent taxed middle earners (governments can't borrow substantial sums on average taxpayer earnings), or a much bigger budget in balance via nominally light, 1 percent flat-tax style taxation of a numerically small 0.001 percent dense with wealth of the Elon Musk variety? Clown question? If only.
So focused are deficit and debt hawks on the alleged immorality of debt left to future generations that they gloss over the true burden of government spending: it’s an enormous tax on progress in the present as central planning of resources always is, which means the real burden of government consumption is the much less evolved society left behind for future generations in concert with a much bigger government to maintain.
Which means the obvious answer to the above question is that the balanced budget scenario is the much bigger, much crueler inheritance. In a nation with herculean wealth creators like the U.S., a balanced budget has nothing to do with limited government, and everything to do with huge, immoral burdens passed on to the sainted grandchildren.
Yet deficit and debt hawks continue to fashion themselves as the responsible protectors of the present and future. See a recent Wall Street Journal letter-to-the-editor by Texas Tech professor Alexander Salter in which he suggested Sen. Ron Johnson “deserves credit for pushing the government to return to its ‘pre-pandemic level of spending,’” not to mention the routine laments about deficits and debt from left (Catherine Rampell, William Galston), right (Jessica Riedl, Elon Musk), and in between (Maya MacGuineas, Ryan Bourne, and many more).
Johnson’s debt and spending sanctimony indicates that if we could just get back to spending levels of roughly $4.5 trillion “pre-pandemic” that all would be well with a budget in balance, and perhaps in “surplus.” How very naïve. And that’s because balancing the budget or achieving a “budget surplus” in a nation blessed with a growing roster of billionaires is the baseball equivalent of hitting a home run over a 5-foot wall 25 feet from home plate.
Despite this, deficit hawks continue to make the nominal debt the “crisis” of the future when at some point those who line up to buy U.S. debt will allegedly cease doing so, or whatever. The hawks not only marinate themselves in sanctimonious aphorisms like “the bill is coming due” and the “federal government is sitting on a ticking time bomb,” but they personify non sequitur. Information pregnant markets continue to tell us paying off the debt will be the easy part (see falling Treasury yields since 1980 amid soaring debt), yet the hawks continue to spend all their time on what’s simple while blithely missing the real crisis.
It’s not all the debt, as argued in The Deficit Delusion, but the sad fact that America’s rich are so overtaxed as to render future payment of it such a foregone conclusion. Yes, the crisis is too much tax revenue now, and exponentially more federal tax revenue in the future. Worse, the previous truth ensures that when politicians happen on a future “crisis,” an eventuality as certain as the sun rising, scandalously excessive taxation will enable easy borrowing to centrally plan a response. See “Trump,” “coronavirus,” “panic,” and “lockdowns” if you’re confused.
What’s comical is that Salter (as with most hawks mentioned) sees entitlement reform as the only solution to a problem that he profoundly misreads. Yes, Salter’s unwitting aim, like that of his fellow hawks, is to give Congress and the White House even more fresh powder to “do something” in the future. Talk about a crisis.
