Debt is something owed that must be repayed. How can that be good? It’s a liability, not an asset. We just refinanced our mortgage, which is good, because we’ve lowered the interest rate and eliminated the evil of private mortgage insurance from our household. Now, our monthly payments will be lower, and without PMI, our lender will be motivated at least partly by our own best interests.
Yet debt is still debt. It’s still a bit scary to realize that you owe over a hundred thousand dollars. Within my short lifetime, home mortgages were less than the current price of a Corvette. Probably less than the going price of a Suburban. Now we can’t even get into home ownership without laying out well over $100 grand. So, mortgage debt must be tolerated. At least the interest is deductible on income taxes.
We could pay off our mortgage completely in about three years, if we had no other expenses. That amount of debt may be normal, but it’s still ominous. At least we don’t have other debts at the moment. What I don’t get, though, is why several people during our refinancing process encouraged us to borrow more than we needed to refinance the mortage. It might make sense for people whose poor judgment or legal circumstances have accumulated high-interest debt against them, but can that be so common? Have so many been brainwashed into thinking that carrying debt is a good thing?
If many people think carrying debt is good, that might explain why so many have little regard for the liability of their sins before God. Wrong beliefs about financial debt may spill over into wrong beliefs about spiritual debt. The use of debt as a picture of sin may be rather ineffective in a day when so many are looking for salvation in the form of government bailouts.
When I lived in Wisconsin, I enjoyed hearing news about a congressman from another district, Paul Ryan. (My own was Tammy Baldwin, an embarassment to Wisconsin.) Ryan was just getting started back then, but now is the ranking Republican on the House’s budget committee. Today he presented an alternative budget, summarized here, which will be studiously ignored by the mainstream media. I see good things in there, definite improvements over the one from the White House. For example: not raising taxes. I see that as a good thing, considering that it was the Bush tax cuts that ended the last recession, and it was the Reagan tax cuts that began and encouraged the era of general prosperity lasting into the 1990’s.
Yet as I looked at a comparison table, I noticed how huge the debt remains, even under this alternative budget. Since the numbers are so huge, it may be helpful to see the debt as a percentage of Gross Domestic Product. As I understand it, the GDP is an estimate of our economy’s total production of wealth for a given year. Since the United States is such a large (the largest?) world economy, it’s a vast number. The debt our government would carry, as a percentage of GDP, is 82.4% under the White House budget. So to pay off that debt completely, the government would have to confiscate 82.4% of the wealth produced in America in a single year. Ominous barely covers it, especially when we notice how much of that debt is held in communist China. Under the alternative budget, it’s “only” 65.1%.
I suppose that much debt is “necessary” because the government is trying to be “responsible” to its commitments, like Social Security, Medicare, and other entitlements. But meeting those responsibilities by incurring massive debts doesn’t seem so responsible. Wouldn’t it make more sense to end those entitlements altogether? Yet I think I see the problem: an entitlement exists not only in the budget, but in the minds of American voters. They want to cheat death and hardship through governmental power, as long as possible. Until that changes, it’s full speed ahead.
How can the attitude of voters be changed, so that they care about more than their own comforts; so that they consider the future of the United States as a greater good than illusory social “security?” If it can’t be done, then the American democratic republic will devolve into a kind of tyranny, or topple altogether. If it can’t, then the capitalist engine of American prosperity will be replaced with the sort of economy that brought the Soviet empire to its knees.
My simple suggestion is that state and federal governments budget to
spend only what they expect to receive in tax revenue, every single
year. To make that possible, they should read their constitutions and
commit to do only the things enumerated there. The people should reform
their sense of entitlement, and realize that suffering and death are
inevitable in this fallen world. Yet (and here’s the key) there is
another, perfect world prepared for us, and to which we are all invited.
Faith in the Gospel of Jesus Christ is magnificently practical. When we are certain that we will have paradise in the life to come, we can cope and flourish much better in the imperfect here-and-now.
The answer to this problem, then, is bigger than the government. It’s time for Christians to appreciate what we believe not only for its eternal value, but also for its present value. Let today be lived responsibly in faith, both personally and in cooperation with our neighbors. Let heaven be heaven, and until then, live here on earth, with certainty of God’s favor through the death of Jesus Christ.
Then, I think, we could budget more sensibly.