Last week there was an article in The Wall Street Journal on our national debt and how it was spiraling out of control. And no one seems to be concerned. The article said,
“The Democrats’ reconciliation package envisions a trend in federal spending that would balloon the national debt well past $33 trillion in fiscal 2024 and to $45 trillion—more than $350,000 per taxpayer—by 2031. We are already paying nearly $400 billion annually to service the interest on the debt. And one of the primary reasons we are even able to meet this obligation is that interest rates are historically low. With rates expected to rise steadily in the coming years, the accumulated debt bomb will begin counting down to a fiscal reckoning.”
Recently I went back and read a blog I had written back in May 2018 titled, “Is America Going Broke.” I would like to share a few thoughts from that blog.
I was recently in Washington D.C. and had the chance to visit several museums. One thought that struck me powerfully is that our founders were seeking to create a government and a nation that would last forever. George Washington called it “the Great Experiment.” Abraham Lincoln called it “the Undecided Experiment” with the hope that we could learn from history so that we might defy history and build a free society that will endure.
The great scholar Os Guinness wrote an insightful essay titled “This Too Shall Pass.” He addresses the problem of slow-motion cultural decline. He believes there is a simple reason why slow-motion decline is such a particular threat to our country. He says “Great civilizations and empires of the past have always been wrecked on two great reefs – the presence of sin in human society and the passing of time. No human success is forever.”
Guinness then makes this powerful observation:
“The year 1787 witnessed not only the ‘miracle’ of the Constitutional Convention in Philadelphia but also the completion of the last volume of Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. A fall beyond belief, Rome’s end – Gibbon wrote from Luasanne – was “the greatest, perhaps, and most awful scene in the history of mankind.” And the first of the four reasons given? “The injuries of time and nature.” In his Lyceum Address in 1837 Lincoln spoke similarly of “the silent artillery of time.”
John Cogan is a senior fellow at Stanford University’s Hoover Institution. He says:
“It is not so much a problem of having to run a deficit from time to time, it is that it has become a natural component of our government. However when those deficits grow year after year they will lead to slow-motion financial collapse. Governments who ignore ‘the injuries of time’ are those who expose themselves to its destructiveness.”
Author Jim Rickards provides some real insight into this with an article titled “Is this the Moment of Truth?” He quotes from Ernest Hemingway’s novel The Sun Also Rises.
Bill Gorton, a friend of the protagonist, Jake Barnes, has just arrived from New York. Bill is in the café talking with Mike Campbell, an upper-crust Englishman, now fallen on hard times but keeping up appearances
In the course of telling a story about his tailor, Mike casually mentions his bankruptcy. Here’s the dialogue:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
“What brought it on?”
“Friends,” said Mike. “I had a lot of friends. False Friends. Then I had creditors, too. Probably had more creditors than anybody in England.”
Mike believes that he was helpless and that his descent into bankruptcy was beyond his control.
I believe Hemingway’s words “gradually and then suddenly” is a warning on the slow but steady accumulation of debt with no plan to stop it, nor to repay it. Though it can gradually continue over a long period of time, then suddenly there will be a full-blown financial disaster the likes of which no one has ever seen.
It’s the lack of control that allows the debtor to reach the point of non-sustainable debt, the “gradually” part, and then have a crisis thrust on him all at once, the “suddenly” part. This is how the inevitable becomes a surprise.
Hemingway’s point was that bankruptcy comes much faster than anyone, especially the bankrupted himself, expects.
I believe the one principle that undergirds all of life and is so pertinent to all of this comes from the Apostle Paul who says; “Do not be deceived, God will not be mocked, whatever a man sows, this he shall also reap.” (Galatians 6:7).
He warns us not to be deceived because so many of us are blind, believing we can live any way we would like without facing the consequences. Whether you are an individual, a business, or a government you cannot make up rules for life on the fly. There are always grave consequences when you are out of touch with reality.
Notice that Paul also says “whatever you sow.” It is all inclusive. The law of sowing and reaping is functioning in every arena of life, regardless of intentions, regardless of how well you understand it, or regardless of whether or not you believe it is true.
So much of the destructiveness in our world is because we break the fabric of God’s design and we reap what we sow.
I believe the words that capture the essence of this blog were written over 200 years ago by Scottish historian Alexander Tyler. He said, “A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy.”
Do not be deceived, God will not be mocked!