Thursday, July 14, 2011

A Christian Perspective on the National Debt Crisis

The huge news of the day in this country is the national debt crisis.  No sane person can deny that the national debt is a serious problem in this country.  Our government is borrowing billions of dollars that we are unable to pay.  It doesn’t take a genius to figure out that if this trend continues it will lead to financial disaster.  Financial disaster will lead to numerous other problems including most likely a moral decline of our society (some would say we are already experiencing this moral decline).  I would argue that the national debt is as much a moral issue as it is a financial one.  I believe that our country has finally accepted the fact that we have a problem.  The question facing the country is what we need to do about reversing this disturbing trend of increasing debt.  The answer to solving the national debt is obvious but not easy.  We have 3 options.  We can increase government revenue, cut government spending, or we can attempt to do both. Most conservatives contend that we do not have a revenue problem, but we have a spending problem and we need to make deep cuts in government spending.  Most liberals may be willing to accept some limited government spending cuts especially toward business and people considered rich or successful, but they contend that we must also raise government revenue (raise taxes).  Both sides are hesitant to suggest specific spending cuts due to political repercussions.  As soon as any spending cut proposals are offered, the other side is quick to attack.  So here we sit at a stalemate because both sides can’t agree on a solution.   The result is the American people continue to suffer the consequences.   I understand the difficulty in reaching an agreement, but I think I have some common sense thoughts and possibly even a couple solutions.

First of all, let’s take a look at why the increasing national debt is considered a crisis.  The national debt affects every citizen, but most especially the young people because they are most likely going to be forced to foot the bill.  This really irks me, because the people in government who have created this crisis will not be held responsible for their irresponsible actions.  Perhaps taxpayers aren’t completely absent of blame either; we should have been much more engaged and proactive in monitoring the spending habits of our government.  We have freedom of speech and the voting booth which provided us opportunity to make our voices heard.  We are at crisis level because we no longer have the money to pay off the debt.  

Just like the government, families must have to budget.  Responsible families do not spend money that they do not have.  As the father and head of my family, I am very conscience of our ability to pay off our debts.  Only in the most dire and extreme situations (ex. medical expenses) would I consider using my credit card if I knew we would not be able to pay the debt in full when we got the bill.  I follow this principal not because I want to be cheap, but because I want to be responsible and I know that if we start to accrue debt we will be in far worse trouble down the road.  We might get a short term benefit, but long term the family will suffer.  Sometimes there are things I would like to buy or things I would like to do, but I know that I don’t have the financial means to do so and it would hurt not just me but my entire family.  The government needs to look at the budget as families look at their budget.  They should look at taxpayers as if they were family.  If someone in your family gives you a $20 and asks you to mow their yard, would you spend that money on candy and then come back and ask for $200 so that you can buy a lawn mower?  This would be extremely insulting to the family member who gave you that money expecting you to use it to mow their yard.  Likewise, the government should not be spending taxpayer money on non-essential programs that taxpayers do not need or want, and then ask them to pay more taxes so that we can pay off the debt.  We pay taxes to the government so that they can protect our freedoms and provide security.  We are not authorizing the government a blank checkbook so that they can go on a spending spree and finance whatever special project they personally see fit.  It is not their money.  It is the taxpayer’s money and the taxpayer should decide how it is used.  There may be some well-intentioned programs that the government will have to cut.  This does not mean that these programs in and of themselves are bad, but we cannot afford to pay for all of the programs the government supports.  Not only that, but how many of these government run programs could be run more efficiently by local communities or small businesses?  The government is not the answer to all our problems, and in fact it is often the government that creates many of our problems.

We need some leaders; real leaders who are not afraid to do the right thing regardless of the political consequences.  Each side has their ideal solution, but the reality is that compromise on both sides will be necessary to reach an agreement.  What do I think we need to do to solve this national debt crisis?
1.       We need to pass a Balanced Budget Amendment.
a.       Those who oppose a balanced budget say it would be irresponsible.  I say that it is irresponsible to not have a structure in place to slow and eventually pay off the debt.  Those opposed are also concerned what a Balanced Budget Amendment would mean for programs that are not set from year to year such as unemployment benefits especially in a bad economy.  I say include rainy day funds in the budget to address these concerns.  The government does not HAVE to spend every penny they receive.
2.       Distinguish between essential and non-essential government programs. 
a.       This is probably the most difficult step to agree upon, but I think there are some criteria that can be used to help us distinguish what is essential.  Most important is the security of the citizens and the protection of our God given freedoms.  Also essential is education of our children and certain infrastructure projects.  There can be some debate about many of the other government programs, but we must prioritize where we spend money.
3.       Analyze the efficiency of all government funded programs starting with non-essential programs.
a.       The government might be well intentioned with some of the programs they fund, but some of these programs may not be efficiently run or mismanaged. 
4.       Make fair but significant cuts in government spending after careful review of all programs.
a.       We will not be able to tax our way out of this debt.  We will have to make some tough decisions, but we absolutely must make some spending cuts if we are going to have any chance of getting the debt under control.
5.       Review and reform tax laws to address any loop-holes or inconsistencies. 
a.       Some consideration should be given to eliminating some tax credits if it is determined the elimination of these credits would have minimal impact on the economy.  I would think things such as mortgage deductions on multiple homes would be an example of a credit that could be looked at as a possible elimination.

So those are my proposals.  It seems like common sense to me.  Don’t spend what you don’t have.  One thing I know for sure is that doing nothing is not an option.  My prayer is that the two sides can come together on this important issue and make some positive changes.  It is immoral to leave this huge financial burden for our children.  So what do you think?  Do you agree with me or do you have some other ideas?  Leave a comment with your thoughts.



Anonymous said...

Dear Mike,
I am not an american, but america does affect me even if I live in a remote part of India. I am a fellow christian.

You have rightly pointed out the various steps to be taken to reduce the debt crisis. The senators have to now show genuine stewardship in taking the world through this crisis.

The Government has to spend, and it has spend on right things - More than cold efficiency calculated on economic terms, the government needs to more people centred and consider equity. You used the 'Fair' for cuts. I would use the word 'fair' for expenditure. (See for an understanding of fairness.
Give unto Caesar what is due to him is our earnest christian command. What will a rich man do with all the wealth - is Jesus question to each one of us.
Only if 1% of the rich in the US can put together a 'Patriotic fund' it would make a huge dent in the debt. But do the rich trust the US Government to do so. Do they feel that the US government will use the money sensibly and equitably (Stewardship). The Gates, Soros and many others put a huge amount of money on charity (and good work too)so there is no dearth of 'loosening the strings'.


Mike said...

Excellent points Suranjeen. Thank you for your comments. It certainly adds to the discussion and it is interesting to get the perspective of someone who does not live in the United States. I agree with you that the government really needs to look at how and on what the spend money. Unfortunately I do not have much faith that the government, especially under this current administration, will spend the money wisely.