Death of the debt hawks

For years, Republicans have warned that America faces an existential threat: the ever-rising national debt, which now sits well north of $20.6 trillion. That's more than $63,000 for every single American citizen. Throughout the Obama presidency, GOPers warned that big fiscal deficits were leading the U.S. toward economic crisis. The 2012 Republican National Convention even featured two huge digital debt clocks in the arena.

But the Trumpublicans have pulled the plug on their national debt clock. It's just not their thing anymore. Just a month or so after signing a red-ink-bleeding tax cut, President Trump had nothing to say about the debt during his State of the Union address Tuesday, or about reforming the Medicare and Social Security entitlements, key drivers of past and future debt and deficits. House Speaker Paul Ryan, rumored to be retiring after the midterm elections, may be the only major Republican who thinks entitlement reform should again be at the heart of the GOP agenda.

Democrats think they know how this story unfolds. Deficits are almost surely headed higher, thanks to both the tax cut and demographics. Wall Street banks such as Goldman Sachs and JPMorgan Chase are predicting a return to trillion-dollar deficits next year. When that happens, Democrats fear, Republicans will once again morph into debt hawks and call for big spending cuts. If not then, surely Republicans will loudly sound the debt alarm the next time a Democrat is in the White House ... right?

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Don't count on it. Trump won the Republican primary and then the general election by disavowing traditional GOP positions on spending and debt. That is a powerful real-world lesson for current politicians and future candidates. It also suggests any remaining GOP debt foes will get little help from the Trump White House, at least when it comes to Medicare and Social Security reform.

And even before Trump's candidacy, GOP interest in these issues was already fading as older voters became a more important voting bloc in the party. Republicans started calling Medicare and Social Security "earned benefits" due hard-working, middle-class taxpayers. Although Republicans may be more willing to cut Medicaid and income-support programs — viewing them as dependency-creating welfare for Democratic voters — such moves still mean spending political capital. But why make such an expenditure when debt isn't really thought a problem and there are other GOP priorities with greater political payoff? New roads and bridges or a defense buildup surely have greater voter appeal than lowering the debt-GDP ratio. And it's always a good time for more tax cuts when you are a Republican. Plenty of GOPers want to make permanent the temporary tax cuts in the recently signed Tax Cuts and Jobs Act. Beyond that, Republicans could push to slash the hated capital gains tax rate and completely eliminate estate taxes.

Then there's the economic reality that, at least for now, the U.S. economy seems to be doing just fine despite a doubling of the federal debt burden since 2007 and the prospect of another doubling over the next generation. Even some conservative economists concede that the economy may have plenty of debt-carry capacity, especially given the low overall tax burden and our debt being issued in our own currency.

Finally, GOP debt hawks have often been aided by fellow worriers on the left. But that seems less likely in the future as the Democratic Party shifts ever farther to the left. Liberal policymakers and wonks alike seem entranced by the notion that traditional economic theory about government debt is all wrong. If you are looking for a Democratic counterpart to GOP tax-cut guru Arthur Laffer, keep an eye on Stephanie Kelton, an economic adviser to the Bernie Sanders presidential campaign. She's an advocate of "modern monetary theory," which holds that as long as there is spare capacity in the economy, government should feel free to spend, spend, spend. Its most devoted evangelists frequently show the sort of fervency also seen in fans of cryptocurrencies.

That's where the Democrats are. And at least in practice, Republicans may not be too far behind. The age of the debt hawks may well be over.