What the Bible teaches about national debt and our children
Congress passed President Trump’s $900 billion COVID relief package last year and recently added President Biden’s $1.9 trillion bill with the approval of 63% of Americans. Why shouldn’t people be happy about getting money they didn’t have to work for? It’s like winning a small lottery.
Biden has proposed spending more than $2 trillion on improving the country’s infrastructure to boost the economy and improve the competitiveness of the U.S. internationally. Many have argued the U.S. needs such improvements to keep up with China’s growing dominance in international trade. Modern Monetary Theory assures us that nothing can possibly go wrong. If the spending splurge sparks inflation, the government can tax it away, so don’t worry. Only a few cranky politicians, such as Rand Paul, oppose it.
What should be the attitude of Christians toward such massive spending by the federal government? Does the Bible provide any guidance? Does it matter?
The government will finance most of the spending through debt because politicians fear raising taxes. Only a generation ago, all conservatives, not just Christians, considered it immoral to pile up debt to solve current problems and leave it to our grandchildren to pay. We used to take pride in paying our own way. Now we have no problem sponging off anyone, including our grandchildren.
Paying our own way would mean accepting the losses in wealth caused by the pandemic-induced recession today or raising taxes to pay for the spending. But raising taxes is unpopular, would damage the economy, and defeat the purpose of the relief. Instead, we borrow money that future generations will pay back through higher taxes, higher inflation, or default by Washington.
Some will argue that rescuing the economy today will leave future generations wealthier and better able to afford the costs of mountains of debt. That might be a sound argument if bureaucrats spent the money wisely, but every surge in spending by the federal government in the past has been plagued by waste, corruption, and theft. That has been true since the founding of the nation. Read How Capitalism Saved America by Thomas DiLorenzo or his recent article “Central Banking as an Engine of Corruption.” Much of the “infrastructure” spending will go to “bridges to nowhere.”
Only 10% of the COVID bill went to those hurt by the pandemic. Republicans estimate that less than 6% of the bill will improve infrastructure, while other studies show that, at best, half the money might hit the intended target. Biden loves to talk about high-speed trains and super sonic jet travel, but neither are part of the plan.
According to DiLorenzo, many state constitutions prohibit their state governments from borrowing for similar spending because in the middle of the 19th century many states went bankrupt because of it. So don’t fool yourself into thinking the massive federal spending will be wisely invested and benefit future generations. Most of it will be wasted and become a heavy burden for our grandchildren. We know better.
Concern for our grandchildren was a driving force in making America great according to economist Joseph Schumpeter in Capitalism, Socialism and Democracy. Capitalism improved our standards of living because businesspeople saved and invested in order to leave a legacy for their children. Concern for their children gave them a long-term perspective. Schumpeter worried that the decline of the family would lead to the demise of capitalism because, without that future orientation, people would let property rights erode and spend their wealth on themselves rather than invest for the future.
The most influential economist of the 20th century, J. M. Keynes, promoted our present disregard of the future with the philosophy that in the long run, we’re all dead. So why worry about it? But what does the Bible say about the long run?
“If the dead are not raised, ‘Let us eat and drink, for tomorrow we die.’"I Corinthians 15:2
“Go to the ant, O sluggard; consider her ways, and be wise. Without having any chief, officer, or ruler, she prepares her bread in summer and gathers her food in harvest.”Proverbs 6:6-8
“The prudent sees danger and hides himself, but the simple go on and suffer for it."Proverbs 22:3
“A good man leaves an inheritance to his children’s children.”Proverbs 13:22
“But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever.”1 Timothy 5:8
Of course, we do provide for our children. We abstain from pleasures to provide them with food, clothes, and a good house to live in. We pay for them to join sports clubs, have cell phones, and take music and dance lessons. Some of us pay for them to attend private schools and save for their college education. Then we crush them with government debt.
Young people have a hard time financially after they leave home because we spend so much on ourselves as old people. The Social Security, Medicare, and Medicaid taxes they pay for us reduce their incomes. Healthcare insurance costs about $15,000 per year for a family, even if young people don’t know it because their employer pays most of it. Premiums are so high largely because the law requires young people to subsidize the premiums of older people who use it the most.
Now we have added the burden of the national debt. The United States owes $68,400 per citizen or $183,000 per taxpayer. People who know little about economics say the debt is no problem; we owe it to ourselves. But our grandchildren will have to pay for it one way or another. The preferred method since World War II has been to erode the value of the debt through price inflation. Workers demand higher wages, attempting to keep up with rising prices, and the higher income boosts tax revenues. But higher wages push workers into higher tax brackets and rarely keep up with price increases, so people grow poorer. High inflation was the main cause of the erosion of real wages throughout the decade of the 1970s.
Don’t be fooled by socialists or silly monetary theories. Massive federal spending eats our grandchildren’s future.
Roger D. McKinney lives in Broken Arrow, OK with his wife, Jeanie. He has three children and six grandchildren. He earned an M.A. in economics from the University of Oklahoma and B.A.s from the University of Tulsa and Baptist Bible College. He has written two books, Financial Bull Riding and God is a Capitalist: Markets from Moses to Marx, and articles for the Affluent Christian Investor, the Foundation for Economic Education, The Mises Institute, the American Institute for Economic Research and Townhall Finance. Previous articles can be found at facebook.com/thechristiancapitalist. He is a conservative Baptist and promoter of the Austrian school of economics.