Like it or not, Washington D.C.’s debt is our debt. And we the people must see our nation’s financial house for what it is ─ a financial fiasco that needs great moral courage and decisive action.
For too long we have kicked the “deficit can” down the road and avoided facing financial reality and making the tough decisions regarding our structural deficits. It is now time to pick the can up and adopt a moral, sweeping and detailed deficit-reduction plan.
We cannot afford to wait until next year and risk further downgrades. We have a negative outlook with all three major credit ratings agencies and they are looking for concrete deficit reduction conduct from Congress before year’s end.
The Need for Deficit Truth — Not Political Brinkmanship
Federal Chairman Ben Bernake’s recent comments were unequivocal in noting that the legislative brinksmanship displayed for the entire world to see this summer unsettled the financial system. Specifically, Bernake said, “The negotiations that took place over the summer disrupted financial markets and probably the economy as well, and similar events in the future could, over time, seriously jeopardize the willingness of investors around the world to hold U.S. financial assets or to make direct investments in job-creating U.S. businesses.”
Real political and moral leadership is about playing it straight with the American people. Politicians on both sides of the aisle have been duplicitous of late, including President Obama when he said, “The good news is that the problems the U.S. faces are imminently solvable…We need tax reform that will ask those who can afford it to pay their fair share as well as modest adjustments to entitlement programs like Medicare. This doesn’t require any radical steps.”
The truth is that there are no easy fixes. Easy fixes were politically passed over in the 70s, 80s and 90s. Reaching the point where we will not have more government than we are willing to pay for with taxes is a radical step.
The fact is that it will very be difficult to grow our economy and deal with the deficit at the same time. Our goal should not be to eliminate the deficit or balance the budget in the short term as we are decades away from a balanced budget. Our goal should be to stabilize the federal deficit so that it is no longer growing faster than the economy.
Morally dealing with the deficit is not about front-loading a deficit reduction plan that would derail economic recovery. It is more about having the moral courage to justly address our structural deficits in the form of entitlements within a comprehensive deficit plan that includes pro-growth tax reform, spending caps and trigger mechanisms.
The world’s largest bond manager, Bill Gross, aptly put it when he recently lamented, “Unless entitlements are substantially reformed, I am confident that this country will default on its debt; not in conventional ways, but by picking the pocket of savers via a combination of less observable, yet historically verifiable policies – inflation, currency devaluation and low to negative real interest rates…You must attack entitlements and make ‘debt’ a four-letter word.”
A Moral Framework for Making Budget Decisions
If we are to be stewards of Providence, our attitudes and actions toward running up the deficit and in reining it in must be done with profound respect for human dignity, employing the virtues of temperance, justice and solidarity. The quality of life for all neighbors, especially the poor, must be primary.
The U.S. Bishops have repeatedly urged Congress to ensure that budget cuts don’t unfairly affect the poor. After all, the poor and vulnerable did not cause the budget deficit themselves and they should not be asked to disproportionally pay for it.
Still, we the Church and our leaders must be much more vocal regarding the need for fiscal reform and the moral imperative to adopt a current plan that will responsibly pay down our debts over time. We will not have the same kind of social safety net that protects the poor if we do not soon fix our debt-ridden financial house that funds it. Ultimately, we cannot solve a debt crisis by issuing more debt.
In the Bishop’s letter to the U.S. House of Representatives on July 26, 2011, it was made clear that every budget decision should be assessed by whether it protects or threatens human life and dignity. Moreover, the poor should come first in the budget, where government has a duty to promote the common good of all, particularly ordinary workers and families who struggle to live in dignity in difficult economic times.
In the letter the Bishops urged a moral budget framework consisting of:
- Shared sacrifice by all;
- Raising adequate revenues;
- Eliminating unnecessary military and other spending; and
- Addressing long-term entitlement programs fairly.
Looking Less to the State and More to Shared Sacrifice
We should not be looking to the government as our first resource. Unlike past generations of Americans, we expect too much from our government and we expect to pay too little.
Doing the right thing regarding the deficit means coming to grips with the harsh reality that massive deficits ultimately require the government to do less with less and we the people to do more, pay more, and to expect to receive less from the State.
Like our nation’s founders who gave their lives, their fortunes and their sacred honor in founding America, we too, must display a similar moral courage rooted in sacrifice.
In the end, sacrifice is the foundation of our faith and the life that Christ continually calls us to. It is through mutual sacrifice that our marriages are made holy, and it is only through mutual sacrifice that our moral crisis can be justly answered and America’s s budget deficit responsibly reined-in.
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