Our streak of economic growth is masking extreme fragility in our current situation. The growth itself has come from an unprecedented amount of gov’t stimulus during a late-stage recovery: $1T annual deficit spending, artificially low interest rates, & deficit-financed tax cuts.
Consider: when the next recession hits, what tools will we have at our disposal to respond? We’ve fired all the traditional bullets. The Fed won’t have slack to reduce rates, our debt-to-GDP ratio is already at 107%, & more tax cuts will be difficult to afford. We’ll be stuck.
The mismanagement of our economy & our public budgets during the latter portion of this recovery will rank among the most irresponsible & short-sighted mistakes in a generation. It’s also going to dramatically exacerbate the pain of the next downturn.
Our economy may appear strong right now, but it’s gilded in many respects. The longer we continue to put off the hard choices by juicing our economy & adding to our deficits, the darker our future looks.
At some point, this will all seem so clear—but by then, it’ll be too late.
At some point, this will all seem so clear—but by then, it’ll be too late.
What’s most embarrassing as a conservative is that the GOP has presided over its fair share of this mismanagement. It willingly abandoned its principles to max out our credit cards. It had the chance to put us on a sound footing heading into a downturn. Instead, it went nuts.
So, when an R starts claiming they created the “strongest economy in decades”—ask them these questions: Ask them how $1T deficits are conservative. Ask them why badgering the Fed to keep rates low is conservative. Ask them if 107% debt-to-GDP is good. They won’t have an answer.
