Saturday, January 23, 2010

Moral renewal, key to ending U.S. debt slavery- I

My last posting ended with the contention that we shall find no solution to the economic crisis America faces unless we are willing to address the foundational moral crisis from which it springs. This has been the analytical basis for my involvement in national politics since I first stepped into the arena. In January 1996, I gave a brief (8 minute) speech at a GOP dinner in New Hampshire that was later featured on James Dobson's Focus on the Family radio show, in which I simply declared "We don't have money problems. We have moral problems." Events since that time have conclusively demonstrated the truth of that statement, culminating in the 2008 financial crisis brought on by a train wreck of unbridled greed, heedless political ambition and individual irresponsibility.

Sadly, that debacle was simply an episodic manifestation of the deeply structural economic vulnerability created by the dissolution of America's moral fiber. I was led to ponder this recently as I read Jerome Corsi's WND article Forecast: Debt to dwarf GDP:

A blue-ribbon panel that includes three former heads of the Congressional Budget Office is telling President Obama and the Democrat-controlled Congress that the federal deficit must be cut now or the national debt within about two generations will be 600 percent of the gross domestic product.

"The debt level of the United States is unsustainable, something has to give," said Rudolph Penner, former head of the CBO and co-chairman of a report issued last week by the National Research Council and the National Academy of Public Administration.


"The panel suggested four different solutions, varying the mix of entitlement program spending and tax increases in the policy alternatives." All the alternatives involved some mix of national restraint in the form of lower spending, higher taxes, or reneging on promised Social Security and Medicare benefits for the elderly. It's ominous that "all four budget alternatives were constructed with a view to keeping the U.S. debt on what the panel considered a sustainable ratio of 60 percent U.S. debt to GDP." Apparently the panel gave no consideration to any alternative that would place the debt slavery of the American people on a path toward extinction.


As John Steele Gordon note in his article A Short history of the National Debt, "It was not ever thus."

Before the Great Depression, balancing the budget and paring down the debt were considered second only to the defense of the country as an obligation of the federal government. … In 1865 the vast debt run up in the Civil War amounted to about 30% of GDP; by 1916 it was less than a tenth of that.

There even was a time when the U.S. made it a deliberate policy to pay off the national debt entirely – and succeeded in doing so.

Though in 1790 Alexander Hamilton called the national debt a national blessing, he understood that the blessing was both the incentive and reward for fiscal responsibility. The Founding generation treated the goal of extinguishing the post-Revolutionary war government debt as an essential part consolidating and defending America's independence. They institutionalized the government's commitment to this goal with the establishment of a sinking fund intended to make sure that in the use of any surplus government revenues, priority would routinely be given to paying down the national debt. Thus despite the cost of
fully funding almost all U.S. governmental debt obligations (including state debt) as the new Federal government was launched, and borrowing to finance the Louisiana purchase, the ratio of debt to GDP under U.S. Presidents who were leaders during the Founding period fell to below 10% from a high of 35% in 1792.

The purpose of setting a strategic goal is to discipline the planning process. The implementation of plans, however, depends on the effective discipline of the people who must carry them out. Thanks to the delusions of socialist (Keynesian) economics, after WWII the U.S. government abandoned the strategic goal of debt reduction. Thanks to a politics based on those same delusions, the American people were encouraged by self-serving political leaders to abandon all semblance of personal discipline as well. This culminated in a "we can have it all" approach to government finance that gradually corrupted the whole financial system.

For the last two generations the American people has behaved like the spendthrift heir of fiscally responsible parents, indulging in a debt financed spending spree. We have squandered the moral capital of international trust and confidence accumulated by the generations before us. This has partly been the result of materialistic self-indulgence. But ironically, it has also partly resulted from the moral impulses of compassion. The problem is that there is a lie at the heart of the supposed good intentions. The lie is revealed in the preference for government as the instrument of compassion. It allows people to bask in the warm glow of doing good while avoiding any real personal involvement or commitment.

For example, the natural plan for social security rests on the simple premise that, as parent are obliged to take care of their children, so children are obliged to take care of their parents. On the one hand, this plan requires parents who work and sacrifice for their children, and children who respect the example and authority of their parents. On the other hand, it requires children who accept the work and sacrifice involved in caring for their aging parents; and parents willing enough to forego the pride that would otherwise prevent them from accepting some degree of dependence upon their children.

Simply by reestablishing this natural and age-old system for mutual self-reliance, we would slow the demand for government entitlement, increase the stock of human and material help available to every individual in need, and alleviate the fearful sense of vulnerability that leaves so many prey to the notion that their personal security depends on the government's authority and largesse. The symbol of the successful acceptance of the sharing and mutual obligations, constraints and sacrifices the natural family system involves is the coming together of the generations under one roof, grandparents and parents, children and grandchildren making room and mutual provision for one another as the givers and receivers of example and care.

How have we become a people for whom the prospect of actually living in such a household subtly offends our sense of personal freedom, aspiration and pride? I'll further explore the ramifications of that question in my next posting.

15 comments:

MaryAnnH said...

WOW! I knew it was bad, but I never dreamed it was this bad. At times it seems like we're devolving into a 3rd-world country. Humanists and Darwinists like to believe man has evolved over time and that there is no God. I have long thought that man started out perfect in the Garden of Eden, and has been devolving ever since they tasted the forbidden fruit.

ericraper said...

The United States of America has developed a morality crisis. In order to resolve this crisis, Americans must submit to God’s rule. This process begins with Christians at a "grass roots" level. CHRISTIANS must submit to God's rule. Subsequently, Christians must also tell others about the good news of Christ, that they can now become God's children.

Isle of Wight said...

"Christians" are too busy backstabbing. I cannot believe the many people I have heard comment with gross negligence the words spoken by Pat Robertson recently about the earthquake in Haiti - and how many blogs I have seen negative and inaccurate comments on. It was even a big deal here on our local news - just minutes from where CBN is. All of us in this area have watched the 700 Club prosper and help MANY people all over the world for YEARS now. Yet one statement (I watched that morning and KNEW that his words would be twisted around) was taken by so many and twisted into something HE NEVER SAID. I could not believe the number of self-reported "Christians" who had such negative things to say. THE MAN TOLD THE TRUTH! Now who do you think is responsible for encouraging "Christians" to speak out in such a negative fashion against other Christians??? Certainly not JESUS... We all seem to have such a different opinion as to what it takes to make a Christian and yet the Bible speaks of A Spirit of Truth, not the spirits of truths...

A few years back, I asked my grandmother when did nursing homes start up because of some questions I had about Social Security. She said when she was a little girl, there WERE no nursing homes. Her father even built a little house in back of theirs for his mother-in-law when she got up in years. People were more responsible in that era because they were not used to the government "giving" them everything. And they knew how important family was.

We keep letting government control our lives and dictate to us what we can and cannot do - and what THEY (the very few) will allow us to do. WE LET THEM. We sit at home and LET them. We do not have the willpower to even walk to the TV and change the channel. For that matter, many of us do not even start our cars by turning the ignition today. All this convenience and for what? Too make us more reliant on something or someone else to do what we are very capable of doing if we would get off our sorry behinds and do it.

Look at digital TV. What a joke. We LET OUR government tell US that we HAD to switch to digital TV. WHY? We are so self absorbed that we can't think past the convenience of it all. And for some, it is not all that convenient. Not everyone wants to waste $50+ a month for an idiot box because we don't know how else to be entertained or relaxed. What a simple minded people we have become and it took less than 50 years to do it. And we wonder why we have a person who is most likely an illegal alien sitting in OUR White House pretending to be king of the world...

nail-in-the-wall said...

"The American providence is to avoid a system devoid of 'Citizen Ownership'."

More complete response at AIPnews.com

http://aipnews.com/talk/forums/thread-view.asp?tid=11814&posts=2&start=1

vonroy said...

Alan,

I would like to submit, for your consideration, that the reason the debt crisis exists, at its root, is the failure of the government to secure the private property rights of their citizens.

I agree that human nature is self centred and greedy. It has been this way since Adam, and will remain as such until Jesus returns. It is an error to attribute the vast increase in government debt and personal debt to a particular moral weakness of our generation when the prior ones have been just as self centered, and when there is an identifiable failure of government which fully accounts for the present situation.

Ubiquitous debt has come into existence because of the fact that our government uses, and forces its citizens to use, a fiat currency rather than granting citizens the liberty to choose their medium of exchange. Those few who have been authorized to create the fiat money, that we are forced to use, distribute that money by only one means - the loan market via the banking system. Can there be any other outcome to such a system than that those licensed to create money out of thin air eventually become the de facto owners of all property? Realize that the outcome of our present system is that now practically every business and every home is, in principal, owned in part or in full via the mortgage issued by a bank.

The production of money is filled with moral and ethical implications. Jorg Hulsmann has written the best analysis of the ethics of money production that I am presently aware of. He concludes, I believe correctly, that creating money in and of itself is not wrong, but what is wrong is forcing someone to use a particular money. This is because of the violation or property rights, when one creates fiat money out of thin air and forces others to accept it in payment against the will of the sellers he is demanding something for nothing. The increase in the quantity of money diminishes its value and is something that no holder of money desires. Our situation today is, in principle, little different than that where ancient kings debased their coinage in order to defraud their citizens of wealth. Today our government, and banking system which pyramids with its base in the Federal reserve, does the same to us. The common justification of politicians of borrowing from the future for the benefit of the present is a lie - the only resources available for use are those that presently exist. The creation of money simply transfers the ownership of what does exist from one to another by unethical means. The elimination of the special legal privileges of money creation granted to the Fed and banks, and the elimination of legal tender laws resolve entirely the problem of booms, busts, and mass indebtedness.

Thomas Jefferson knew well what I am speaking of when he said "I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered."

I would appreciate your reply, if you have addressed this matter already I am unaware of it.

Chiu said...

I would submit that a fondness for the fiat monetary system is a sign of moral rather than intelluctual weakness. It isn't as though those who moved America off the gold standard didn't understand where it would inevitably lead...they just lied about it. Keynesian economics is not so logically compelling that policymakers adopt its prescriptions, but rather the prescriptions it provides are tempting to those who lust for power.

The idea of a free lunch is never persuasive to anyone who has an intact sense of personal morality or intellectual curiosity. The honest man doesn't even want a meal for which he does not intend to pay a fair recompense. The thinking man will not rest until he discovers exactly who does pay for his meal, and why.

Stan Johnson said...

In reference to your comments on Social Security, I believe that government originates in the family--that our first lessons of governing and being governed rightly come from within the walls of our own homes. Fathers and mothers provide for the defense, common welfare, and needs of their children and, later in life, their parents. It's part of a natural cycle that has been around for pretty much all of human history.

I understand how the Great Depression era was able to severely damage people's abilities to provide, but the fact that even after we pulled out of that Depression, we still continued to cling to the "new way" of caring for the aging concerns me.

Thanks for being a wise and articulate voice in support of time-tested values and practices.

Derek P. said...

Debt. What is the numerical formula that is to be used to reconcile our national debt? Is it as simple as saying that we generate two trillion annually, while spending three trillion in the same amount of time; instead we should only spend one trillion of the two that we generate while applying the rest to debt reduction. Can it be as simple as that?

One of the first casualties of debt reduction would be big government. Numerous government entities (departments) would have to eliminated in order to facilitate a meaningful effort at debt reduction. Foreign aid would also have to be significantly curtailed. Just to name a couple.

Debt reconciliation will be a multi-generation undertaking. Sadly, we will not be able to leave a clean slate for our children to work from. Sadly, our children will not be able to leave their children a clean slate to work from either. How far down the line it will go is beyond me. But one thing is for sure - they'll all look back to our generation and ask 'why?'

Dawg_em said...

The Founding generation treated the goal of extinguishing the post-Revolutionary war government debt as an essential part consolidating and defending America's independence.

Could it be they believed indentured servitude was a very small step above outright slavery? This generation has the exact opposite approach. Massive indebtedness for the purpose of forcing alliances, membership, in a global cabal thereby eliminating sovereignty. Once under the (not so) benevolent care of this new order, interdependence becomes the new independence. Yeah. And up is down, black is white, left is right.

But not to worry. It gets better. Especially after the Great Whore of Babylon (the U.S.) sells her assets (and soul, what's left of it) to the ChiComs. Personal debt is on a micro level compared to the macro-enslavement taking place.

Once again Dr. Keyes is correct. It's not that those who make these decisions are uneducated or stupid. They are morally bankrupt. But who enables them to carry out their evil designs? Could it be the same people who are shackled to this false two-party system who allow themselves to be manipulated like puppets at the whim of their marionette masters?

MaryAnnH said...

Dawg 'em, you are the DUDE! Well said. :)

vonroy said...

Derek,

I posted yesterday, but the message never appeared on this forum. I am trying again.

Debt of the type I am speaking of comes about only at those instants in time when money is created out of thin air by a lender and issued to a borrower. The bible well says the borrower is the servant of the lender. Does it not violate your sense of justice that a few legally privileged can attain the position of a master over a servant for having done essentially nothing but exercise a special legal privilege of printing ink and paper which is granted to but a few men? It is outside the scope of my post to addressing the different issue of the case where one person saves money he earned and loans it out to another. See the book by Murray Rothbard called the "mystery of banking" for an explanation of the mechanism. A pdf file containing the entire book is available online on the mises institute website for free.

Nothing would have to change about big government if the government is willing to be honest and straightforward about the level of taxation it is already imposing on its citizens. We are already being taxed to fund all the government programs through inflation. If the creation of money stops, and the government doubles taxation it will be a wash. Of course, I do not believe people would be so inclined to accept big government if the costs of it were in the open rather than masquerading as higher prices (than would otherwise be) for every item you purchase on the market. But this is a good thing that should be brought about as soon as possible, the future generations will not be worse off, but better off. They will look back and say 'thank you'.

Chiu said...

If those in the government were honest and straightforward, they would not espouse the aggrandizement of their own positions which is inherent to an enlarged role for the government.

vonroy said...

Chiu,

Can you elaborate on your point a bit more? I'm not sure I'm understanding what you are trying to say. I had expressed the opinion that it is nothing but foolish to entrust to wicked men (bank and government officals) with a printing press which allows them to create money. You concurred that they are wicked, but I think you are implying that nothing can restrain their evil (e.g. a constitution). Even if they could not be restrained from printing paper notes we might well hope citizens would be free to reject them and use the medium of exchange of their own choosing. But as it is we do not have the freedom as legal tender laws still exist - which is one of the greatest problems of our country because abolishing this alone would undermine the capability of the government to command resources without practical limits. What shall we hope for then? - anarchy?

gilbertabrett said...

The "government" is gonna get theirs soon enough... they forget who runs this country - as well as "we the people" seem to have forgotten. We will see in November...

Has anyone noticed, or am I going crazy, but it seems the past 48 hours, the "news" media in the USA (yes, OUR country, not Canada) is printing and airing comments that are seemingly derogatory of Obama? Such as an op-ed piece in the NYT's by Bob Herbert asking who Obama is. A little too late they are...

Chiu said...

My point is that the problem with unlimited government is not that the wicked may get into power, but that only the wicked want unchecked power in the first place.

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