Most of us are aware that the way our nation was accruing debt was unsustainable. Ultimately there are only two ways to lower the debt or at least minimize its detrimental course: raise taxes or spend less.
The problem is most economists believe either of those strategies would compromise an already fragile recovering economy. Lowering taxes also stimulates growth and spending, but also increases the debt. As the government spends, it puts money into the economy stimulating spending and growth, while also obviously increasing the debt at the same time. It should be noted some economists (like Peter Schiff) believe that when the government stops stimulating the economy through “quantitative easing” or stimulus spending (two terms for injecting large amounts of money into the economy), the economy returns to where it would have been anyway with one exception: a much larger debt.
There were really only two solutions: continue the disastrous course we were on (aka continue adding massive amounts of money to the debt) or bite the bullet.
Michael Farris is a lawyer and the founder of the Home School Legal Defense Association (HSLDA), as well as the founder of Patrick Henry College. He’s written a number of books, and one of them I was reading recently is entitled The Home Schooling Father. Interestingly he wrote it in 2001 and said, “We should demand that our government respect the economic freedom of our children and grandchildren by eliminating the national debt. In the fall of 1992, the national debt was $4 trillion. That is $16,000 for every man, woman, and child in America. A $4 trillion stack of $1000 bills would be 245 miles high.”
I couldn’t help wondering what Mr. Farris must be thinking about our nation’s current situation? Now our debt is over 3.5 times that amount. Interestingly, one of our most prominent founding fathers, Thomas Jefferson said, “The question whether one generation has the right to bind another by the deficit it imposes is a question of such consequence as to place it among the fundamental principles of government. We should consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves.” Throughout the talks that take place whenever there’s discussion about raising the debt ceiling, the phrase, “kicking the can down the road” is often used. Although we’re suffering at this time because of our decisions, Jefferson – like almost everyone else – recognizes the people who will really be suffering are our children.
Man has an amazing capacity to sacrifice the future for the present, but what’s surprising is that man even has the capacity to sacrifice our children’s future for our present. The preamble to our Constitution states the purpose of the Constitution is to secure the blessings of liberty to us and to our posterity, something we definitely are not doing.
Here’s a quote that I hope doesn’t – although I’m afraid will – define our nation: “A democracy cannot exist as a permanent form of government. It can only exist until the voters discover that they can vote themselves largesse from the public treasury. From that moment on, the majority always votes for the candidates promising the most benefits from the public treasury with the result that a democracy always collapses over loose fiscal policy, always followed by a dictatorship. The average age of the world’s greatest civilizations has been 200 years.” Could a candidate win in our nation if he talked about us making the sacrifices for our nation’s and our children’s futures? Sadly I doubt it. As the percentage of our nation receiving entitlements grows, so too will the number of voters who want candidates promising more spending, furthering our nation’s problems.
Michael Farris makes another point about governments promising more jobs, a promise we’ve been listening to for years. He says, “Politicians who campaign that they will create jobs should be viewed with deep suspicion. The only way the government can create jobs is to tax the people and employ a person to work for the government or for a contractor doing work for the government. The best thing the government can do to create jobs is to lower taxes. Then businesses have an incentive to succeed. Government should also reduce regulation so that business have a chance to succeed.” So it seems pretty clear in his estimation, the best way for the government to stimulate the economy (whether through spending or taxing less), he’d choose lower taxes.
The Bible has a lot to say about our nation’s casual view of debt and spending. Proverbs 13:22 says, “A good man leaves an inheritance to his children’s children.” I don’t know if there’s a better verse describing the exact opposite of what our nation is doing. It would be one thing if the only thing we were doing wrong is not leaving an inheritance to our children, but our sin goes far beyond that in terms of actually robbing our children’s futures from them. They are the ones who will be saddled with the problems we’re making today.
Proverbs 22:7 says, “The borrower is servant to the lender” and Romans 13:8 says, “Owe no one anything.” Does anyone understand why we have a debt ceiling if we keep raising it? If the purpose of a debt ceiling is to prevent debt from reaching a certain amount, and if we’re just going to raise the ceiling when we reach it, let’s get rid of the pretenses that don’t have any real significance anyway.
Psalm 37:21 says, “The wicked borrows and does not repay.” While you could argue that our nation has never defaulted on its debt (even though we were within days of doing so, and the news each day focused on the alarm associated with the possibility of our nation doing so), we currently borrow $0.40 of every dollar we spend and that percentage will continue to increase until default is inevitable. The US lost its triple-A bond rating with S&P’s following the debt ceiling increase, and received a negative outlook for the future indicating there’s risk of a further downgrade if the government’s fiscal discipline weakens or the economy deteriorates significantly. China’s official Xinhua news agency said in a commentary, “The U.S. government has to come to terms with the painful fact that the good old days when it could just borrow its way out of messes of its own making are finally gone.”