I do not claim to be a financial expert, but it does not take an expert to note the out-of-control spending by the US government. Since 1917 when a federal debt limit was first established by the US Congress, the US’ debt has increased to approximately $31.5 trillion dollars. Almost all of this increase has occurred since 1980. Interestingly, the US Debt Clock website (HERE) shows our nation’s real time debt in fantastic detail. It is fascinating, yet sad.
To be clear, the US debt limit is the total amount of money that the US government is authorized to annually borrow to meet its existing legal obligations (i.e., paying off and servicing debt it owes against money it borrowed). This includes Social Security and Medicare benefits, military salaries and interest on the national debt – among other payments.
The US Department of Treasury’s website (HERE) currently puts forward the position that failing to continue to increase the US debt limit would have “catastrophic economic consequences.” That amazes this writer because the causation is clearly too much spending(!), not the failure to raise the debt limit. The cure, similarly, is less spending; however, this is a notion that seems foreign to government nowadays, as it is hard to do and it and inhibits the ability of politicians to curry favor with voters.
The gross divide, politically and spiritually, in our local, state and federal governments between progressive and conservative viewpoints or convictions, has prevented necessary fiscal corrective action in recent decades, but that doesn’t change the fact that the US’ future depends on our elected officials to recognize the problem and do something about it in unity. Spending more money will not fix our budgets nor strengthen our country or its influence worldwide. We need Godly wisdom to prevail in our governmental institutions, with the US Congress leading the way and setting the example.
Our elected officials have failed for years now to even approve an annual federal budget within the prescribed timelines, instead resorting to stop gap, emergency measures which inevitably result in upward adjustments of the debt limit instead of reducing spending. If you or I managed our household budgets or businesses similarly, we’d be hungry, homeless, bankrupt and/or out of business – if not jailed. That’s something worth considering the next time we step into a voting booth.
It seems that when another person’s money is being spent (read: taxpayer funds), then somehow all is fair game – even if our excesses will make the lives of our children and grandchildren harder. Saddling future generations with unmanageable debt is certainly not a wise nor biblical approach to stewardship.
As reported yesterday by REUTERS (HERE), the GOP is negotiating a proposal with the White House to replace the US’ federal debt ceiling (currently set at $31.4 trillion) with a rule that would instead limit debt to a share of national economic output.
In simple terms, the total national economic output is known as the Gross Domestic Product (“GDP”). The GOP proposal involves using the debt-to-GDP ratio to establish a federal debt limit, which is a formula comparing the country’s total debt to its economic productivity (debt ÷ GDP = debt ratio). The debt ratio indicates the strength of a country’s economy and the likelihood of paying off its debt.
Currently, the US has a debt ratio of approximately 122% – meaning the US spends considerably more on its debt than it produces economically. The issue becomes sustainability, loss of future credit ratings, and ultimately, the ability to repay the debt and produce balanced budgets.
Interestingly, the last time the US approved a “balanced” federal budget with a surplus was in 1998, under the Bill Clinton administration – with follow-on surpluses in 1999, 2000 and 2001. Although he was no longer president at the time, the 2001 budget was formulated under the Clinton administration.
The challenge in reducing the national debt is to make the hard choices in reductions and spending without creating a situation in which future administrations need to spend excessively to replenish critical governmental operations enumerated under the US Constitution to the federal government, such as our military forces. This was the situation following Bill Clinton’s presidency. Regardless of political preferences, we should always remember, as a country, that the world respects our strength whether we care to admit it or not.
My brothers and sisters, money is not evil in and of itself (Ref. 1 Timothy 6:10); however, when our LOVE (or perceived need) for money becomes more important than anything else in our lives or society in general, it becomes an idol valued above even God (Ref. Psalm 135:15). And, like any idol, it will not bring salvation and goodness to our lives, but it will eventually bring destruction, because when one puts his or her trust in money first and foremost, there will never be enough of it until one is consumed. The scriptures warn that the borrower is servant to the lender (Ref. Proverbs 22:7)!
1 Timothy 6:10 (NKJV)
“For the love of money is a root of all kinds of evil, for which some have strayed from the faith in their greediness, and pierced themselves through with many sorrows.”
Proverbs 22:7 (NKJV)
“The rich rules over the poor, [a]nd the borrower is servant to the lender.”
Psalm 135:15 (NKJV)
“The idols of the nations are silver and gold, [t]he work of men’s hands.”
