Hi tkc,
I'm trying to go to a place where words like conservative are given a meaning beyond "responsible" or "prudent".
The world throws curve balls at you. The times when your choices are most meaningful are when you deal with a major problem. When you make a decision between, say, continuing to spend in spite of revenues falling, or cutting back to accommodate reduced circumstances.
That choice isn't always obvious within an economy (which has more moving parts than a company, say). It isn't always right to say I shall be cautious and cut back. Recently, we saw a catastrophic demand failure and the best available answer was for the US government to continue spending because private industry wasn't. The apparently sensible (German) answer which demanded cuts yielded a vortex, into which Greece and Ireland (amongst others) fell. In part this was because Greece employs the euro and so it couldn't devalue to solve some of its problems.
That isn't to say that Greece had no use for reform and discipline. But timing matters.
So when I asked what is the meaning of economic conservatism I was thinking that the appropriate response to a situation is usually contextual. It depends on the environment you inhabit at that moment rather than on an idea such as living within your means. A stance that is appropriate on one occasion may not be on another.
My view is it is usually appropriate for the government to lean against the current character of the economy. Sometimes that means you open the borrowing spigot and sometimes you close it. The fiscal multiplier looks to me the heart of the issue. I don't know if it is a constant or variable with circumstances. I suspect the latter.
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