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Fiscal conservatism is the economic philosophy of prudence in government spending and debt. Fiscal conservatives advocate the avoidance of deficit spending, the reduction of overall government spending and national debt whilst ensuring balanced budgets. In other words, fiscal conservatives are against the government expanding beyond its means through debt, but they will usually choose debt over tax increases.

In his Reflections on the Revolution in France, Edmund Burke argued that a government does not have the right to run up large debts and then throw the burden on the taxpayer, writing "it is to the property of the citizen, and not to the demands of the creditor of the state, that the first and original faith of civil society is pledged. The claim of the citizen is prior in time, paramount in title, superior in equity. The fortunes of individuals, whether possessed by acquisition or by descent or in virtue of a participation in the goods of some community, were no part of the creditor's security, expressed or implied. ... The public, whether represented by a monarch or by a senate, can pledge nothing but the public estate; and it can have no public estate except in what it derives from a just and proportioned imposition upon the citizens at large".citation needed

Factions or subgroupsedit

Although all fiscal conservatives agree generally on a smaller and less expensive government, there are disagreements over priorities. There are three main factions or subgroups each advocating for a particular emphasis. Deficit hawks emphasize balancing government budgets and reducing the size of government debt, viewing government debt as economically damaging and morally dubious since it passes on obligations on to future generations who have played no part in present-day tax and spending decisions. Deficit hawks are willing to consider tax increases if the additional revenue is used to reduce debt rather than increase spending.

A second group put their main emphasis on tax cuts rather than spending cuts or debt reduction. Many embrace supply-side economics, arguing that as high taxes discourage economic activity and investment, tax cuts would result in economic growth leading in turn to higher government revenues. According to them, these additional government revenues would reduce the debt in the long term. They also argue for reducing taxes even if it were to lead to short term increases in the deficit. Some supply-siders have advocated that the increases in revenue through tax cuts make drastic cuts in spending unnecessary. However, the Congressional Budget Office has consistently reported that income tax cuts increase deficits and debt and do not pay for themselves. For example, the CBO estimated that the Bush tax cuts added about $1.5 trillion to deficits and debt from 2002 to 2011 and it would have added nearly $3 trillion to deficits and debt over the 2010–2019 decade if fully extended at all income levels.

A third group makes little distinction between debt and taxes. This group emphasizes reduction in spending rather than tax policy or debt reduction. They argue that the true cost of government is the level of spending not how that spending is financed. Every dollar that the government spends is a dollar taken from American workers, regardless of whether it is from debt or taxes. Taxes simply redistribute purchasing power, doing so in a particularly inefficient manner, reducing the incentives to produce or hire and borrowing simply forces businesses and investors to anticipate higher taxes later on.