Fiscal conservatism facts for kids

Fiscal conservatism is a way of thinking about how a government should handle its money. It's a key idea that separates people called conservatives from those called progressives. The main goal is to make sure the government spends less money than it brings in. This helps create a balanced budget.

People who believe in fiscal conservatism want the government to get less involved in the economy. They prefer that private businesses do more. This often means selling government-owned businesses to private companies, which is called privatization. It also means reducing rules for businesses, known as deregulation. The aim of these ideas is to lower taxes for everyone. They also want to cut programs or groups that seem wasteful. Another big goal is to reduce the country's public debt, which is money the government owes. Finally, they want to encourage people to invest their money within the country.

What is Fiscal Conservatism?

Fiscal conservatism is a belief that governments should be careful with money. It means they should spend less and save more. This idea is important in politics, especially in countries like the United States. It shapes how leaders decide on taxes and spending.

Balancing the Budget

A big part of fiscal conservatism is having a balanced budget. This means the government does not spend more money than it collects. Think of it like your allowance: you try not to spend more than you get. When a government spends too much, it has to borrow money. This borrowing creates public debt. Fiscal conservatives want to avoid this debt.

Less Government in the Economy

Fiscal conservatives believe the government should not control too much of the economy. They think private businesses and individuals are better at creating jobs and wealth. They want fewer rules for businesses. This idea is called economic liberalism.

Privatization and Deregulation

• Privatization: This means selling things the government owns to private companies. For example, a government-owned power company might be sold to a private business. Fiscal conservatives believe private companies can run things more efficiently.
• Deregulation: This is about removing rules that businesses have to follow. For instance, there might be fewer rules about how a factory operates. The idea is that fewer rules help businesses grow and create more jobs.

Lowering Taxes and Cutting Spending

A key goal of fiscal conservatism is to lower taxes. They believe that people and businesses should keep more of their own money. They also want to cut government programs that they see as unnecessary or wasteful. This helps reduce the total amount the government spends.

Reducing Public Debt

When a government spends more than it earns, it creates public debt. This debt can grow very large. Fiscal conservatives work to reduce this debt. They believe a smaller debt makes the country stronger financially. It also means future generations won't have to pay off today's spending.

Encouraging Investment

Fiscal conservatives want to make their country a good place for people to invest money. When people invest, they put money into businesses or projects. This can help the economy grow. They believe lower taxes and less government control encourage more investment.

History of Fiscal Conservatism

The ideas behind fiscal conservatism have been around for a long time. Many leaders have tried to manage government money carefully.

Key Figures

• Herbert Hoover: As president, Hoover believed in limited government spending. He faced the Great Depression, a very difficult economic time.
• Jimmy Carter: During his presidency in the 1970s, Jimmy Carter worked to reduce the country's debt compared to its economy. This is called the debt-to-GDP ratio.
• Ronald Reagan: President Reagan believed in lowering taxes and reducing government rules. However, government spending also increased during his time in office.
• Bill Clinton: In the 1990s, President Clinton signed a law that increased taxes for the wealthiest people. This helped reduce the government's budget deficit.
• George W. Bush: During his presidency, government spending and debt increased significantly.
• Barack Obama: President Obama also faced a large deficit. He continued some tax policies that aimed to reduce it.

Images for kids

• 

  Herbert Hoover addresses a large crowd in his 1932 presidential campaign

• 

  Jimmy Carter, who reduced the debt-to-GDP ratio in the 1970s

• 

  Ronald Reagan spent the most of any recent President (Carter to Obama) as measured by annual average percentage of the GDP

• 

  This table shows that Bill Clinton's Omnibus Budget Reconciliation Act of 1993 which increased the average federal tax rates for the top 1% while lowering average tax rates for the middle class was followed by President Barack Obama starting in 2013 through the partial expiration of the Bush tax cuts and that both tax increases lowered deficits relative to Congressional Budget Office policy baselines without them

• 

  Comparison of annual federal deficits (CBO 10-year forecast from prior to inauguration vs. the actual amount) during the Obama and Bush presidencies showcasing how George W. Bush added far more to the debt relative to the CBO 2001 forecast than Obama added relative to the CBO 2009 forecast

See also

In Spanish: Conservadurismo fiscal para niños