National Debt

Are you the type of person who gets furious when you hear about an adult abusing or neglecting children? Then, the rising national deficit is something that you should be paying attention to.

Let us imagine a pair of new parents.

They bring their child home from the hospital, place it in its room, then begin filling out credit cards in the child's name. They use these credit cards to buy vacations, electronic equipment, seats at their favorite sporting events, and the like. When the child gets to be 18 years old, the parents give the bills to the child.

These are not good, morally responsible parents. These parents have clearly abused their responsibility to care for the child. Instead of providing the child with what he or she needed for a good life, the parents mortgaged that child's life for their own pleasure.

For all practical purposes, they enslaved the child. They took for themselves the fruits of that child's future labors. So, the child will become an adult that will have a job, where a portion of those wages will be taken from him, and handed over to those who lent his parents money.

The National Deficit works much like this. The present generation spends the money, running up a tab that is then handed to the future generation.

If the present generation spends $1 more than it makes, then some future generation is going to have to make $1 (plus interest) more than spends. The future generation cannot spend that money on their own goals and projects. They have to use the money they make to pay for their parent's expenses.

No Taxation without Representation

In politics, whenever it is possible to tax a group who does not have the option to vote those imposing the tax out of office, there is a risk of exploitation. Representatives simply have no incentive other than their own personal values to stop them from taxing those who cannot vote. Those same representatives have every incentive to provide benefits to those who can vote -- effectively purchasing those votes with government pork.

This is precisely the mechanism that drives the national debt. Politicians who raise the debt are effectively raising taxes on those who do not vote -- future generations who cannot get to the polls. They are using the money to purchase the votes of those who can get to the polls -- today's voters. The net effect is a massive wealth-transfer scheme from those who cannot vote to those who can.

The overall effect is that the tax burden goes up on those who cannot vote, as that wealth gets transferred to those who can. Much like the policy of taxing America to benefit England, our country has adopted a policy of taxing the children to benefit the adults.

Repaying Debts

In addition to the basic moral wrong of robbing our own children for our benefit, we must consider the basic obligation to pay debts. On September 24th, Federal Reserve Chairman Alan Greenspan met with the Finance Minister of France, Thierry Breton. According to Bretin, Greenspan had said, “We’ve lost control of the budget.”

It is not clear exactly what Greenspan meant by this. Yet, it is clearly the case that this is as much a moral failing as it is a failure in economic policy. Our political leaders have an obligation to keep our budget in control. If Greenspan is correct, our political leaders have abdicated on an important moral responsibility.

There is no law of nature that says that American cannot drive itself into economic ruin. There is no law of nature that says that, no matter how much debt we pile onto our children and their children, that they will be able and willing to pay that debt. Immoral acts are immoral precisely because of the destruction they cause to other peoples’ lives. Living beyond our means is immoral precisely because of the disadvantages we force on children who are unable to give informed consent as to whether to accept those burdens.

Exceptions

There are some things for which a deficit makes sense. If a community is building a road, the present community will have to suffer through the costs, while future generations enjoy the benefits. It seems fair to have future generations pay for the road. Therefore, a bond issue or some sort of debt to pay for the road seems appropriate.

When a nation goes to war, this is another case in which a current generation makes a noble sacrifice for which future generations will obtain a benefit. Those future generations cannot share the risks of life and limb that the current generation must endure. They can, however, share a part of the financial burden. It is not unfair to ask them to do so by having them pay back war bonds and other forms of debt.

Also, if professional economists say that a debt is useful to restore a battered economy, I am not going to argue against that professional. If a leader has assigned experts in a subject to give him advice, then he would be negligent in his responsibility if he did not consider the advice of those experts.

All of these cases ultimately follow the same moral principle. Future generations should shoulder some of the burden for things that benefit them.

However, the present generation has a responsibility to determine if future generations will benefit. If the present generation is wrong, then it is the present generation -- not the future generation -- that should pay for the mistake.

The "benefits" that were promised from an attack on Iraq -- to secure weapons of mass destruction and to weaken anti-American terrorists -- have not materialized. Evidence suggests that the current generation has made the lives of future generations of Americans less secure, for which we are also sending them the bill for our service.

In this case, the expenses are hardly justified. The expense mostly took the form of tax cuts for the rich. This means that it actually did go to buying vacations, cars, and other expensive personal equipment. It also went to a war that, it appears, will not provide future generations with any benefit.

Conclusion

This particular wrong is different from many of the others I have spoken of. The other wrongs have victims in the hear and now – victims who are capable of getting angry and taking action to make sure that these wrongs are made right. However, the victims of deficit spending are not able to defend themselves. They’re out on the playgrounds in the nation’s schools or sitting in front of the television watching cartoons. They are trying to get up the nerve to ask Suzie out on a date, or they are not even born yet.

They cannot take care of themselves. They do not know what they need to do to protect their own future, so they count on us to take care of these things for them. They count on us to make sure that they eat well, exercise, do their homework, wash their hands, get inoculated from disease.

In all of this, there should be room somewhere for an obligation not to steal their money – the money they will be making once they grow old enough to get a job. People not willing to live up to this obligation are no better than those parents who inflict abuse and neglect on their children.

Are you the type of person who gets furious when you hear about an adult abusing or neglecting children? Then, the rising national deficit is something that you should be paying attention to.