By Samuel Gregg
As 2010 unfolds many countries are confronting a public deficit crisis of disturbing proportions. Since 2008 countless politicians have underscored that a cavalier attitude to debt on the part of Main St. and Wall St. contributed significantly to the recent financial crisis.
Its therefore ironic to observe these contemporary preachers of thrift plunging developed economies into an abyss of public liabilities.
In 2009 for example the Obama Administration spent more money on new programs in nine months than the Clinton Administration did in eight years thereby increasing Americas annual deficit to $1.4 trillion.
To be fair the federal governments annual deficit rose steadily under the Bush Administration. Indeed this spending-pattern helped create an atmosphere which made it easier for politicians to push through the stimulus packages of late 2008 and 2009. Americas long-term annual federal deficit is now at its highest level since the early 1990s.
The Office of Management and Budget presently predicts that by 2019 Americas public debt will be $18.4 trillion approximately 148 percent of Americas GDP.
In an age when political civic and religious leaders endlessly invoke intergenerational solidarity" thats hardly a proud legacy to bequeath our children. Its akin to forcing them into a form of indentured servitude to us which will last long after weve gone to meet our maker.
A former American Vice-President once reportedly stated: Deficits dont matter".
Actually they do. For one thing much economic policy of the 2010s is going to be dominated by efforts to reduce government deficits. This assumes of course that our political masters have retained some lingering sense of fiscal prudence.
Here the Federal governments recent lifting of borrowing limits for financially-disgraced Fannie Mae and Freddie Mac does not inspire confidence. Nor does Congresss quiet Christmas Eve raising of the federal debt limit to $12.394 trillion.
Deficits also matter because reducing them presents us with difficult choices. One
is to raise taxes. This however reduces incentives to create wealth. A second is simply to inflate the deficit away. But apart from poisoning a currency inflation discourages savings and negatively impacts those on fixed incomes: i.e. the elderly and the poor.
Another option is to reduce government expenditures. But politicians would then not have as much taxpayer money available to pay off the various interest groups that support them during elections. Unsurprisingly theyre not so inspired by this all protestations to the contrary.
Naturally its very easy to blame politicians for the deficit nightmare confronting America and other developed countries. But one of the Bibles most useful pieces of advice is to remove the wooden beam from your eye first; then you will see clearly to remove the splinter from your brothers eye" (Matthew 7:5).
Its true that many politicians in America and Western Europe consistently vote for public expenditures not covered by revenue. But they are not in office because they inherited their positions. They hold public office because many of us vote for them.
Some of us do so because were happy for them to use their legislative powers to make others to pay for particular projects that we cant or wont pay for ourselves. Its part of an unspoken agreement between politicians and the rest of us. We want to have our pork and eat it too.
Others vote for such political candidates because we actually want the state to take care of us rather than assume responsibility for ourselves and our families. Yet others vote for deficit-enhancing politicians because we think we can have mutually-exclusive things such as countless entitlement programs and low taxes.
And then there are those of us who vote on the strange basis of identity-politics or emotionally-satisfying-but-content-less slogans like Hope and Change" while ignoring the woeful fiscal records of politicians of all parties espousing such mottos.
The same politicians habitually make absurd promises to solve all our problems and we go along with it. In short we routinely throw our reason out the door and succumb to messianic sentiment and utopian daydreaming.
Thats what adolescents do not mature responsible citizens.
At some point however the irreconcilable must be reconciled. All those promises and pork-barrels must be paid for. Neither raising taxes nor cutting
expenditures are electorally-palatable solutions for most politicians. So why not run large deficits?
But in the end out-of-control deficits matter because they tell us something about who we are what we want and our unwillingness to make the necessary sacrifices to achieve our goals.
Ultimately its not just politicians who need to be held accountable and repent for our deficit crisis. Its us.
By Samuel Gregg
As 2010 unfolds many countries are confronting a public deficit crisis of disturbing proportions. Since 2008 countless politicians have underscored that a cavalier attitude to debt on the part of Main St. and Wall St. contributed significantly to the recent financial crisis.
Its therefore ironic to observe these contemporary preachers of thrift plunging developed economies into an abyss of public liabilities.
In 2009 for example the Obama Administration spent more money on new programs in nine months than the Clinton Administration did in eight years thereby increasing Americas annual deficit to $1.4 trillion.
To be fair the federal governments annual deficit rose steadily under the Bush Administration. Indeed this spending-pattern helped create an atmosphere which made it easier for politicians to push through the stimulus packages of late 2008 and 2009. Americas long-term annual federal deficit is now at its highest level since the early 1990s.
The Office of Management and Budget presently predicts that by 2019 Americas public debt will be $18.4 trillion approximately 148 percent of Americas GDP.
In an age when political civic and religious leaders endlessly invoke intergenerational solidarity" thats hardly a proud legacy to bequeath our children. Its akin to forcing them into a form of indentured servitude to us which will last long after weve gone to meet our maker.
A former American Vice-President once reportedly stated: Deficits dont matter".
Actually they do. For one thing much economic policy of the 2010s is going to be dominated by efforts to reduce government deficits. This assumes of course that our political masters have retained some lingering sense of fiscal prudence.
Here the Federal governments recent lifting of borrowing limits for financially-disgraced Fannie Mae and Freddie Mac does not inspire confidence. Nor does Congresss quiet Christmas Eve raising of the federal debt limit to $12.394 trillion.
Deficits also matter because reducing them presents us with difficult choices. One 
expenditures are electorally-palatable solutions for most politicians. So why not run large deficits?
But in the end out-of-control deficits matter because they tell us something about who we are what we want and our unwillingness to make the necessary sacrifices to achieve our goals.
Ultimately its not just politicians who need to be held accountable and repent for our deficit crisis. Its us.
