If you think about it, our world revolves around trust. You trust your employer will pay you, or that your customers will meet their payments. In turn, your boss and your clients expect you to deliver. When a society loses the intangible quality of trust, everyone loses. Businesses flee, and the free exchange of commerce is stymied.
This is exactly what happened in 2008. When the big banks like Lehman Brothers defaulted on their ability to meet their loan obligations, people lost their life savings because of some crooks at the top of the food-chain. Deregulation had been continuing for the better part of a decade. Or, more accurately, deregulation started in the Reagan administration and Thatcher era of the 1980’s. This whole move was in response to the persistent stagflation that was happening during the 1970’s.
Needless to say, the same pattern repeats itself; the Bible tells us, “… there is nothing new under the sun,” (Eccles. 1:9). The same motif occurred during the Great Depression, following the stock market crash of 1929. It was during this period that, under Roosevelt, government spending and public projects like highway-building were undertaken. This Keynesian idea was that when the economy is doing poorly, government has to go in debt to get the economy up and moving again.
I wonder if we have taken this whole philosophy a little too far, though? With its high debt-to-GDP ratio, the U.S. cannot afford to lose any currency of trust.
When I hear the news about how the Senate has passed the new budget bill, averting a government shut-down and removing the debt-level cap, I am seriously concerned. “In God we trust,” but in reality America is more and more resembling the famed T.V. show To Debt Do Us Part.
Yes, the economy had been doing well in recent months. Job numbers were up. Manufacturing was humming along. But there is concern about inflation. This normally forces interest rates up, but can you imagine the interest alone on U.S. government debt? We’re talking trillions of dollars…
Since when has it been responsible to live off of our children’s future? Senator Rand Paul rightly has critiqued the government spending in the latest budget. People point to how America needs to lead with strength, not weakness. It needs to rebuild its military… Perhaps. But at what expense?
A cursory Internet search reveals that almost all countries have debt. At the top of the pack, though, is the U.S. This shouldn’t be so. There have been periods in both Canadian and American history with little to no debt. Understandably, during nation-building or war years, the debt has increased. The Harper government has been strong on trying to get rid of the deficit and running a surplus. Paul Martin the 1990’s did well to rein in government spending and balance the books, leading to years of surplus.