Where have all the fiscal hawks gone? We need to find some – and quickly

May 20, 2026 — 5:00am

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Sometime in the last two decades, the fiscal hawk became an endangered species. They once populated a broad terrain on the political right and left. They shared a view that tax cuts and social spending – popular as they might be – are secondary to balanced budgets and low public debt.

In the global blaze of populism, the fiscal hawk lost its habitat. We, too, might soon feel the loss. All the more so in the current global economic dislocation.

It is trite to say that the world has become more chaotic and dangerous. Let us count the ways. The hot war in the Middle East has led simultaneously to an oil price spike and concerns about global recession, on top of the breakdown of global trade rules.

All this is bad enough. The bigger question is whether governments have the resilience to deal with the chaotic jolts of this new world order. That resilience starts with public finances.

Governments are under pressure to spend on cost-of-living relief as war-induced inflation bites, but public finances are weak and deteriorating. The average debt-to-GDP ratio across the OECD group of advanced economies stands at 83 per cent, rising to 85 per cent. The US has a debt-to-GDP ratio in excess of 100 per cent. The UK’s stands at 100 per cent, France at 115, Italy at around 140 and Japan at a whopping 237 per cent of GDP.

Total borrowing by central........

© The Sydney Morning Herald