It is increasingly difficult to make the case for prudent spending and restraint when central banks seem prepared to continually suppress interest rates and prevent the true costs of deficit spending from being felt.
I’ve been doing some thinking lately about how much of an impact the policies of central banks and federal governments have not only on short-term politics, but about the long-term direction of society.
And I’m coming to a conclusion that it may be nearly impossible for true conservatism to succeed in the short-term in an era where central banks have decided to so blatantly interfere in the economy.
Consider the fact that the basic idea of conservatism is to be prudent, to limit centralization of power in any one area, and to be restrained in terms of spending.
In a normal world, things ebb and flow, and that idea has its time.
People vote for left-wing parties to enhance government spending, which then goes too far, leads to rising deficits and interest rates, and causes a correction towards more prudent spending.
This is not just political, it follows the business cycle as well, with exuberance leading to booms, which then leads to malinvestment, and then significant corrections that make prudent saving a wise move.
This back and forth in society is why no party should ever expect to win permanently. Humanity needs both left-wing and right-wing (and everyone in between), because every part of the political spectrum has important ideas and insights.
However, for more than a decade, central banks and federal governments have dramatically ramped-up their direct interference in the economy.
Consider the immense amount of money printing and debt we have seen both leading up to, and now during the Wuhan Virus crisis.
Consider that since the 2008 financial crisis, governments and central banks have seemingly decided that they won’t really allow recessions, and will simply inject more and more money into the system every time a downturn seems imminent.
And consider that it is nearly impossible to make a credible argument against governments just giving money out to regular people, since governments and central banks have been giving money out to big banks and big corporations at unprecedented levels.
In addition, governments have incentivized massive surges of debt, by injecting more and more money into the system, restricting real growth, and raising the cost of living, while suppressing interest rates.
They have created the conditions for bubbles to form, but never let the bubbles truly pop, prolonging the correction.
So, we have a system filling up with debt all over the place, with weak growth, and an increasing disconnect between real economic activity and all the created money flowing through the system.
This all creates a serious dilemma for conservatives.
Should they simply seek to be a part of the money-printing, endless debt binge?
Or should they campaign against it?
In the short term, going along with it would be the easier political move.
But in the long term, and for the good of our country, we need Conservatives to have the courage to warn about the danger of all this debt and money printing.
Even when it may seem unpopular in the moment, those who speak in favour of limited government, individual freedom, decentralization, and an end to this excessive interference in the economy, will have the credibility of having stood for timeless and necessary principles.