Unholy Debt

With the Federal government debt exceeding the total output of the entire US economy (the GDP), serious minded people are seriously concerned about the economic health of the country. Depending on inflation and interest rates, the interest payments on the debt could, by the end of the decade, exceed the total Federal budget of only a few years ago. The effect of such excessive government spending is to remove money from the private economy, keeping unemployment at unhealthy levels, nearly 10% now, and double that if you include the underemployed.

The same problem exists in the States where typical yearly deficits are in the billions of dollars, in excess of $20B in California. States are trying all kinds of tricks to balance their budgets, usually including borrowing tons of money if they can get it. Unfunded future liabilities for government retiree’s pensions and health care costs are impossible hurdles in many States. (In California it exceeds $500 Billion.)

Now church leaders are beginning to speak out about the immorality of massive debt. "America's growing debt is a not just a financial issue, it's a spiritual one," said Jerry Newcombe, of the Coral Ridge Ministries. "The Bible is very clear about the moral dangers of debt." The evangelical ministry has been sounding the alarm about the "monstrous debt burden" to its estimated 500,000 devotees through radio programs, print publications and its website.

Likewise, the Family Research Council has delivered "action alerts" about the debt to its network of 40,000 pastors. The Christian Coalition, Concerned Women for America, and the Faith and Freedom Coalition are also warning members that the deficit is reaching immoral proportions. ("National debt is new hot issue for evangelicals," by Daniel Burke, Religion News Service)

Generally, people are concerned about the effect on unemployment and the threat to long-term prosperity of historically high levels of spending and debt. Another, perhaps even greater, issue is the harmful effects on the targets of government largess. The sad state of New York welfare is a prime example.

New York’s Medicaid program covers nearly 5 million people, a quarter of the total population at a cost of $53 billion (combined federal and state money), more than any other state, even California, with twice as many enrollees. Think about that. One quarter of New York residents receive Medicaid, at a cost of over $10,000 per person.

Now Medicaid is supposed to be a last-resort safety net for those who do not receive medical care through their own or employee insurance or Medicare. Yet New York Medicaid covers parents who earn up to 150 percent of the federal poverty level and childless adults up to the poverty level. New York also provides optional benefits including prescription drugs, dental and vision care and even long-term care. (New York Times editorial, 2/19/11.) Quite the nice safety net! In addition to the Medicaid giveaway, this quarter of New York residents likely receive food, rent and energy subsidies, and pay no Federal or State income taxes. These 5 million people are effectively wards of the State.

So what about these millions of (mostly) able-bodied folks who receive welfare, food stamps, rent and energy subsidies, Medicaid, etc, and pay nothing at all for it? Do they feel good about it? Are they motivated to improve their lot? Daniel Patrick Moynihan, working for Lyndon Johnson in 1965, warned America about the self-destructive consequences of the Welfare State. Star Parker’s Uncle Sam’s Plantation exposed the personal tragedy of a young woman “chewed up and spit out by our country’s ruthless welfare system.” If you look at the many longitudinal studies of welfare recipients from the 1960s until today you find a dismal record of social improvement.

As Aristotle said 2500 years ago, “If you want to encourage something, reward it.” President Johnson’s war on Poverty has had the unintended consequences of “family breakdown and illegitimacy; cycles of dependency that transfer from one generation to the next; anger, despair and hopelessness. Judged by its results, the war on Poverty was more a War on the Poor.” (Jay Richards, Money, Greed and God)

This is the unholy Welfare State. It must be stopped.