The United States is facing a public debt crisis. The federal government currently owes more than $21 trillion, which is about $67,000 per person in the country (median individual income in the United States was just over $31,000 in 2016).
The causes of this indebtedness are diverse; a country cannot run up a tab like that without spending a lot on a lot of different things. Indeed, indebtedness has become a feature of our political system itself and not of any one party, figure, or event. Deficit spending has become normalized, especially since the 1980s; and presidential administrations from both major parties and congressional delegations of all kinds of partisan mixes have presided over these increases.
The deficit for the 2018 fiscal year totaled $779 billion. The highest deficit in the last fifty years was in 2009, when the government spent $1.4 trillion more than it brought in. The last time the federal government ran a surplus was 2001. Over the last few decades, these trends have led to historic levels of indebtedness.
These fiscal realities have important implications not only for public policy and political culture but also for our personal and spiritual lives. Current and future generations are inheriting an unprecedented legacy and a habituation to indebtedness.
Deficits, Debt, and the Future
In the words of economist Michael Munger, “Deficits are future taxes.” When the government spends more than it brings in, this represents a reserve against future revenue and spending. Whether through increased taxes or some other more artful ways of relativizing indebtedness (including increasing the supply of money), these debts will eventually have to be repaid. Or, at the very least, the interest on these debts will have to be paid.
Today’s policy choices constrain future possibilities. The accumulation of public debt that must be repaid means that more and more government spending will not be on defense, education, medical care, or any of a number of other important causes. Budgets are moral documents. How we spend our money today is a moral issue. Those choices shape the future for ourselves, our families, and our fellow citizens, and they reflect our values.
Deficit spending is a way of privileging the present—what we want right now—at the expense of the future and those who come after us. No doubt our government expends great sums on worthwhile and valuable things. But today’s consumption and enjoyment also have serious implications for future growth and investment. They represent a claim on the productive labor not only of those who live today, but of future generations as well. This moral aspect of the government’s power to tax and spend is what led Calvin Coolidge to argue that “a government which lays taxes on the people not required by urgent public necessity and sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude.” Speaking of his moral view of government spending, Coolidge once quipped: “I am for economy, and after that I am for more economy.”
Indeed, ideas such as economy, parsimony, thrift, and even austerity should not be off limits in discussions about government spending. They represent critically important aspects of stewardship and statesmanship. Spendthrift politicians are bad stewards; and voters who elect them are privileging narrow interests and ignoring a vitally important element of moral culture: the willingness to sacrifice for the good of others.
Principles and Prospects for Reform
If we accept that there is a public debt crisis in this country, then we must ask what principles should govern attempts to address the problem as well as the practical prospects for such work. To determine the basis for fiscal reform, we must identify the relevant moral considerations and the appropriate role of government.
One of the reasons that government has amassed such levels of debt is that it has been trying to do too much. This is what Abraham Kuyper identified as a tyrannical danger of government, warning that “the State may never become an octopus, which stifles the whole of life.” As government attempts to do more and more, it leaves less and less room for private initiative and personal responsibility. Thus, said Kuyper, the government “must occupy its own place, on its own root, among all other trees of the forest, and thus it has to honor and maintain every form of life, which grows independently, in its own sacred autonomy.” The temptation to look to earthly government as the source of blessings and salvation is the reason that the Psalmist warns: “Do not put your trust in princes, in human beings, who cannot save” (Psalm 146:3).
Part of identifying the proper role of government involves developing a theological account of political economy, especially with regard to the role of debt in the modern world. Debt, like money itself, can be a powerful tool. It is not always and everywhere immoral. But like all powerful tools, debt ought to be respected and handled carefully. The Bible includes a presumption of the reality of debt and indebtedness, in both moral and financial terms, in human life. But the apostle Paul encourages Christians, “Give to everyone what you owe them: If you owe taxes, pay taxes; if revenue, then revenue; if respect, then respect; if honor, then honor. Let no debt remain outstanding” (Romans 13:7–8).
With proper theological perspectives and political principles in hand, we can also consider prudential and practical matters related to budget reform. Just as these massive levels of indebtedness were not incurred in a single day, actions to reform and bring down debt levels must be sustained over the long term. This means that it is more important to make incremental changes that can continue for a long period of time than to try to implement revolutionary clear-cutting overnight. The consistent overspending in the post–World War II period by the American government has to be reined in, but it has to be done in such a way that the promises that have been made to pensioners and retirees, for example, as well as those who depend in many other ways on government activity, can be kept. Bending the curve back toward sustainable levels of government spending requires identifying the sources of our demand for more government expenditure as well as the results.
A consequence of this ongoing deficit spending means that the government has to seek more and more sources of revenue. One common tactic is taxing socially undesirable consumption through “sin taxes” on fast food, soda, alcohol, or tobacco. These moves are often proclaimed as policies that have the best interests of society in view, and the perceived public health benefits are a key aspect of the case for such taxes. But as Kuyper’s image of the octopus indicates, as government expenditures expand, so must the reach of its taxing power; and otherwise worthy grounds for policy proposals often become excuses or superficial rationalizations for expanding the scope of government taxation. Given the trends in government spending, traditional sectors of society like charities, non-profits, churches, and other places of worship are likely to continue to face increasing scrutiny. The push to end or curb tax-exempt status is only going to grow stronger as politicians face dwindling revenues and ever-increasing expectations. One study has estimated that government is missing out on upwards of $80 billion a year by granting tax-exemption to religious institutions, and that potential revenue is going to be increasingly attractive to politicians.
Personal and Cultural Considerations
All of this means that the public debt crisis is part of a broader social crisis and one that has consequences throughout all of life. Our church life and our family life are not neatly separated from public life, and the choices made by voters and politicians have significant spillover effects into other areas. The level of spending the United States has undertaken in recent decades will have substantial effects throughout the economy and society for the foreseeable future.
President of the European Commission Jean-Claude Juncker once addressed economic reform from the perspective of a politician: “We all know what to do, we just don’t know how to get re-elected after we’ve done it.” Politicians are not the only ones to blame for the public debt crisis. In many cases, they are responding to what voters demand. Politicians make promises that the people want to hear, and sometimes they even try to deliver on them, often to the detriment of the public pocketbook. The incentives of our current political system create a situation in which the skills and talent necessary to win elections do not correlate well with the skills and talents necessary to govern properly. We need statesmen rather than politicians, but our system discourages statesmanship and encourages partisan politicking. We remove the structures and incentives for public virtue and then are surprised when politicians behave badly. As C. S. Lewis once put it, “We castrate and bid the geldings be fruitful.”
Many of these problems stem from our loss of the expectation that you get what you pay for and pay for what you get. Taxes are increasingly arcane and invisible. The true cost of government expenditures is likewise hidden. Debt allows us to avoid seeing the actual costs of personal and political choices we make. If the generations that enjoyed the benefits of government expenditure also had to bear the cost, we really would see a popular revolution in political expectations and norms.
In this way, our personal habits and our political culture are not unconnected. When personal debt, from consumption to education, is at an all-time high, it seems unreasonable to expect that thrift would somehow become a public virtue. If we do not act responsibly with the budgets of our own families, it seems unreasonable to expect fiscal responsibility from those who are entrusted with spending other people’s money.
One of the phenomena that has ameliorated the effects of the public debt crisis thus far is that we have enjoyed incredible and sustained economic growth, even while we have incurred more and more governmental debt. There is a sense in which a flourishing and robust economy can afford a certain level of inefficiency, drag, and waste, and yet continue to provide broad benefits. But if the economy were to slow down or stagnate for an extended period, the pressure of accumulated debt would quickly become much more onerous. Continued economic growth becomes increasingly important in the context of high levels of debt and entitlement for the provision of social welfare.
Just as the social debt crisis did not spring into existence overnight, the road to fiscal reform is long and treacherous. A key to traversing this perilous path is to recognize the moral and even spiritual significance of our public debt. Public debt is a matter of public justice and stewardship. These are deeply moral matters that must be on the agenda when we consider political platforms, candidates, and campaigns. But just as these issues are not merely political, they will not be solved simply by voting or campaigning. They need to be addressed at a much more comprehensive level, beginning with ourselves and our own expectations for ourselves, our families, our churches, and our communities. Good government begins with the people, and that means each one of us has a responsibility to be good stewards, of our pocketbooks as well as of our votes.