Drowning In Debt
- Tuesday, October 08, 2013
Editor's Note: Pastor Roger Barrier's "Ask Roger" column regularly appears at Preach It, Teach It. Every week at Crosswalk, Dr. Barrier puts nearly 40 years of experience in the pastorate to work answering questions of doctrine or practice for laypeople, or giving advice on church leadership issues. Email him your questions at firstname.lastname@example.org.
What are your thoughts regarding the significance of President Obama and Congress stymieing themselves in their ability to pass a bill to increase our country’s debt?
Democrats have a strong belief that a major responsibility of the federal government is to care for the poor by funding enormous entitlement programs. The best way to do this is to continue to raise taxes on those more financially fortunate.
The Republicans, on the other hand, think the federal government should stay out of the entitlement
business and allow the private sector to produce jobs and the kind of stable economy which allows the poor the opportunity for financial advancement.
Obamacare legislation increased the gap between parties, and now our government has grinded to a halt.
Both sides have their flaws and both have their strong points.
I do not fully agree with the following statement from Sir Winston Churchill, who served as England’s Secretary of the Treasury in his earlier years, and as the prime minister who led England to victory in WW 2 in his later years. This is a rather broad generalization but it does give those on both sides of the issue pause to consider.
“If you are not a liberal when you are young you have no heart. If you are not a conservative when you are old you have no brains” (Sir Winston Churchill).
Several thoughts come to mind in no particular order.
First, when the federal government is $16,747,468,275,799.27 in debt common sense says that both increasing revenue and cutting expenses is the only possible way to solve our incredible debt load. Tragically, from my perspective, we will never catch up.
Second, let’s not forget that taxation is often used for social engineering. “Taxing the Rich,” is one example.
Third, we have all heard how Robin Hood stole from the rich to give to the poor. Unfortunately, that interpretation is incorrect. Robin Hood did not steal from the rich; he stole from the Sheriff of Nottingham who was the federal government of his time. The sheriff was overtaxing all of the people.
Fourth, today’s dysfunctional federal government is no longer concerned with what might be “best for the country” Their personal focus is obviously, “What stance can I take to get the most votes so that I can stay in office?”
Once again the
The National Debt has continued to increase an average of $1.85 billion per day since September 30, 2012!
The estimated population of the United States is 316,785,031 so each citizen's share of this debt is $52,876.91.
Fifth, for weeks the Democrats and Republicans have argued, dickered and called each other names while the credit rating of the
Sixth, debt is spending money you have not already earned. Our federal government is a master of this.
Seventh, I believe our out-of-control, spiraling national debt will bring down our nation. It is the biggest issue facing our country (except for poor leadership).
Eighth, the Bible has a lot to say about borrowing and going into debt. Government entities at every level would do well to abide by the common sense wisdom of the Word of God. The Biblical goal for any government is not a balanced budget but a surplus budget.
Debt on the scale utilized today is a very recent development in our culture. I think it comes about largely as a result of Keynesian Economic Theory which was first put forth by the English economist John Maynard Keynes in The General Theory of Employment, Interest and Money, published in 1936.
In the early 1980's, I sat with a friend and discussed the long-term implications of Keynesian economic theory. We both concluded the long-term-economic future didn't look bright. I will summarize parts of our discussion below.
In my opinion Keynesian Economics is the misguided philosophy that the government can create and maintain permanent prosperity for its citizens by printing up money and extending credit to its citizens through its central bank—in our case through the Federal Reserve System.
Let’s bring the problem of debt into focus with a few statistics:
1928 – The national debt was $0.
1935 – Debt of $60 Billion which is small compared with the size of our country and economy.
1946 – Debt quadruped to $270 Billion. Most of World War II is in that figure.
1966 – Debt only up to $400 Billion. Stable years of low inflation.
1976 – Debt doubled to 750 Billion. Most of the cost of Vietnam War is in that figure.
Today – twenty-five years later: our national debt has soared past the $16 Trillion mark.
The Private Debt has increased more than the national debt.
1928 – Only 4 Billion. 98% of all homes had no mortgage. No one borrowed money to buy a car in 1928.
1948 – Total private debt grown only to 50 billion. Small in comparison to size of economy. A few homes had 10 year mortgages. A few cars financed for an average of 8 months.
1958 – In 10 years the private debt went from 50 billion to over 1 trillion dollars. The seeds of inflation that we struggle with today were sown in those years.
1968 – Crossed the 2 trillion mark.
1978 – 3 trillion mark was passed.
Today – Total private debt is $16,036,521,445,917. $2 Trillion, about the same as our entire national debt! Today most homes have a mortgage against them for 25-30 years. Most cars are in hock for three to five years. Both government and private citizens are piling up debt at record rates.
We are passing through the Keynesian Economic Era.
Under this theory, if business gets in a slump, or if the government spends more than it receives in taxes, then they just print more money to take care of it. It takes no genius to figure out what is happening. As they print more money it dilutes the value of the money in our pocketbooks. Printing more money creates the illusion of prosperity when all of that money hits the street. But, by increasing the supply of money and extending more credit in the economic system, prices ultimately increase. In other words, the government creates inflation. We all wind up getting less for the same amount of labor and capital.
Inflation is nothing in the world but an immoral system of taxation (see Isaiah One). The government creates inflation by going into debt, by accepting deficit budgets, by spending more than they receive, by printing money – and this way they still get all the things that they wanted in the first place – like bombs… welfare… social security… new dams… salary raises… bureaucracy… etc… and they don’t have to legislate an unpopular tax increase.
The ironic thing is, periodically they legislate a tax decrease and appease us by giving back to us a little bit of what they took away through taxation. But listen, the tax decreases are just a drop in the bucket to what we lose through inflation. How many people do you think that they are fooling with this device? Well, I am afraid that they are fooling many.
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