There’s nothing fiscally conservative by allowing the economy to fall into a deep depression. Contrary to what people thought back in 1997/98 the business cycle was alive and well. We just couldn’t see that with all the tech/dotcom hype that inflated an economic bubble the likes of which hasn’t been seen since the late 1920s.

If the government, through fiscal policy, didn’t jump in and try to stimulate the economy we could have seen a downturn that may have lasted more than a decade. Monetary policy didn’t work…the FED basically shot all of its bullets helping drive interest rates to lows not seen for decades. Tax cuts and additional spending were the necessary ingredients to bring about the growth we’ve seen over the last year or more. Unemployment is at 5.4% with practically no inflation–a great feat considering not even a decade ago 6% was considered inflationary. An even greater feat knowing that many of the jobs lost due to the busted bubble were bubble jobs created for by vapor economy.

I consider myself a fiscal conservative yet I realize the necessary prescription for our contracting economy required more deficits in order to bring about this expansion. Hopefully as the economy grows the deficits will quickly come down. I’m all for reducing the size of government to bring down the deficit though.