Is spartan austerity driving us over the fiscal cliff?

The latest step in the budget dance between House Republicans and the White House has to do with where tax increases (or revenue increases in general, depending on what is called what) fit with a deal to avoid the so-called “fiscal cliff.” As Napp Nazworth reports, President Obama has apparently delivered an ultimatum: “there would be no agreement to avert the ‘fiscal cliff’ unless tax rates are increased on those making more than $250,000 per year.”

On one level it seems reasonable to talk about addressing a deficit from both directions: cutting spending and raising revenue. But as Ray Nothstine put it so well earlier this week, without some structural (and cultural) changes to the way Congress works, it would be insane to think that giving politicians more money is going to change how they spend it. One definition of insanity is doing the same thing over and over again and expecting a different result. Historically “politicians spend the money as fast as it comes in – and a little bit more.” Without some kind of balanced budget agreement, something with real teeth, why should we think things will be any different this time around? (I’ve talked about a more promising “both/and” budget solution before.) As Ray and I have concluded elsewhere, “In the case of the federal spending, the government has proved to be untrustworthy with very much. It’s time to see if the politicians in Washington can learn to be trustworthy with less.”

My commentary this week (republished from Think Christian) tries to put sequestration (e.g. the “fiscal cliff”) into some perspective. As I contend, “The fiscal cliff does not represent some apocalyptic moment in American history.” We don’t have the civilizational equivalent in the House GOP of 300 Spartans defending the Hot Gates.

There has been a great deal of noise made over the consequences of going over the fiscal cliff, focused mostly on short-term negative effects on financial markets and the possibility of returning (if indeed we ever really left) economic recession. We need to take a longer view, though: “Christians, whose citizenship is ultimately not of this world and whose identity and perspective must likewise be eternal and transcendent, should not let our viewpoints be determined by the tyranny of the short-term.” There’s some political equivalent of chasing quarterly profits here in the myopia which currently frames discussions of the fiscal cliff.

This is not only problematic from a Christian perspective, but from an economic perspective as well. Henry Hazlitt put it well when he described the central lesson of economics: “The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

The short-term “crisis” of the fiscal cliff is more indicative of a society that is increasingly dependent upon, even addicted to, government spending. If the cuts represented by sequestration are really so painful to us, that says a great deal about our addictive expectations with respect to the federal government. Our government spending is unsustainable. Full stop. If returning our spending even to the historically high deficit levels of just four years ago represents a “cliff,” then we have far larger cultural and spiritual problems. The fiscal cliff might just be the first step towards weaning ourselves off of excessive government dependency. If so, whatever “pain” we experience might just be withdrawal symptoms…painful but unavoidable if we are to ever move toward a more healthy and sustainable economy.