My $0.02 on the Debt Limit Debate

Update: See my follow-up post as well — “$0.02 More On the Debt Limit Debate

I’ve been reading snippets of headlines, articles and news reports about the ongoing debate in Washington DC over raising the debt limit this week, and I think it’s important to publish something about the question because I believe our national debt is a moral issue in which every American has a stake.

Simply put, Congress must pass a bill by August 2nd allowing our government to take on more debt (by raising the debt ceiling) or we will “default” on our current debt. President Obama and the Democrats are arguing that the plan under which the debt limit is increased must include higher taxes on “the rich” and reform the tax code to raise more taxes from businesses.

Republicans, on the other hand, don’t want to raise taxes (saying it will hurt our economy and inhibit the ability of businesses and wealthy individuals to create new jobs) and want to introduce deep cuts in government spending to stabilize America’s long-term deficit.

Both the President/Democrats and Republican leaders are currently in negotiations to work out a compromise. Obama has announced that he will veto any short-term solution to raising the debt limit, preferring an all-or-nothing compromise.

This is a political calculation on his part — an attempt to pressure Republicans into a compromise they would otherwise not accept out of fear that American will default on its debt (people will recall this is a repeat, in some sense, of the fight between the parties over the government shutdown a couple months ago).

What concerns me as a Catholic is the false dichotomy that frequently comes up during this debate. It goes like this:

“America is spending more than it takes in. If America is to balance its balance sheet, it shouldn’t do so on the backs of the poor. Instead, the wealthy should pitch in their fair share.”

This argument is misguided on many levels.

First of all, neither rich people nor poor people got American into debt. The government got us into debt. It is the government that has spent more money than it has, time and time again.

Second, saying that the government must take more money from the wealthy (both businesses and individuals) to take care of the poor presumes that government is the most efficient way to take care of the poor. I disagree. In fact, in my view, the government is about the most inefficient (not to mention most expensive) way to take care of the needy.

On a deeper level, I have a profound problem with the way the debate plays out in the mind of Democrats right now who suggest Americans must prove why they shouldn’t owe more in taxes. Right now Americans have to say either they a) don’t have money to spare for taxes or b) will use their extra money to invest in creating more jobs and giving back to the country in other ways. This is just the reverse of what it should be: the government owes us an explanation for why it should be taking more of our money.

This is how I would like to see the debt ceiling debate conducted: before politicians and the President agree to allow the government to borrow more money, government should come back and demonstrate how it intends to solve our crippling rising debt. The fact that entitlements (constituting the bulk of America’s future debt crisis) remains a sacred cow to democrats makes it difficult for me to see how they can be trusted to right the ship of state.

In fact, even if Democrats successfully implemented the most draconian tax increases they could formulate the added “revenue” would not solve the entitlement crisis. If Republicans, however, were able to introduce the government spending cuts and entitlement reforms they want to see it is actually conceivable that America’s debt situation could be markedly improved.

How are we to understand this debate in Catholic terms? Currently the Catholic Left is fond of saying that we have a moral obligation to provide for the poor, and from that they argue we cannot morally make any cuts or reforms to entitlement programs designed to aid the poor.

I counter: there’s nothing moral about wasting money and endangering the common good of all Americans by following policies which are demonstrably failing to provide aid for the poor in a sustainable way.

We see this debate played out in miniature in an exchange between Archbishop Nienstedt of Minneapolis-Saint Paul and State Senator David Hann (R-MN). I must make clear that I have enormous respect for Abp. Neinstedt – especially for his brave stand for marriage, the family, and the dignity of unborn human life. On this fiscal question, however, I find myself more sympathetic to the arguments of Sen. Hann (this report was filed by Minnesota Public Radiowhich is financed by tax dollars, I realize):

Sen. David Hann, R-Eden Prairie, is criticizing Saint Paul and Minneapolis Archbishop John Nienstedt for calling on Gov. Mark Dayton and the GOP-controlled Legislature to “not rely on disproportionate cuts in essential services to those living in poverty.”

In a letter to Dayton, Nienstedt said “increasing the depth and breadth of poverty is bad fiscal policy and bad economic policy.”

Dayton and GOP legislative leaders are at an impasse over the best way to craft a two year budget. Dayton wants to raise income taxes on Minnesota’s top earners to erase part of a $5 billion projected budget deficit. Republicans say the deficit can be erased without a tax increase.

… “I was extremely disappointed to learn you endorse the socialist fiction that it is a moral necessity to take the property of the “wealthy” under the assumption that those resources are better used by politicians and bureaucrats than by the individuals who earn them. You speak of hopes the governor will create justice by adopting a budget that “does not rely on disproportionate cuts in essential services.” Although not said explicitly, I take your statement to mean the proposed legislative budget does that.”

… “Certainly we need to be charitable to the neediest among us. Are government programs charitable? Is a pathway to human dignity found in creating dependence on government and suggesting to people that their lives would be better but for the “greedy rich” not being willing to pay their fair share?”

… “It would seem to me the Church has a large task in correcting the moral deficits of our citizens,” Hann wrote. “Telling people they have the moral claim on someone else’s property is wrong and certainly doesn’t help in that work. What the Legislature has tried to do is what you, and every individual and organization in the state tries to do: Do the best we can with what we have.”

[Hann concluded his letter by quoting Catholic theologian R.R. Reno who said, "A Christian who hopes to follow the teachings of Jesus needs to reckon with a singular fact about American poverty: Its deepest and most debilitating deficits are moral, not financial: the most serious deprivations are cultural not economic."]

Archbishop Neinstedt’s full letter can be read here and Sen. Hann’s response here.

I don’t want to see the comment box devolve into an argument about who is right in the exchange above (Abp. Neinstedt or Sen. Hann). Rather I’m interested in finding out which moral vision of the economy, debt and taxes is more compelling when viewed in the light of Catholic social teaching. I believe if you asked Abp. Neinstedt he would be the first to say that the Church does not speak definitively on contingent issues such as budgets, it rather proposes solutions for the Church’s storehouse of teaching and experience.

To recap my view: when it comes to raising the national debt ceiling without making real reforms to the government programs that are causing the national debt to skyrocket in the first place, I think that’s reckless. Putting a band-aid on these problems by raising taxes on the wealthy in a vain hope that government will spend their money more wisely than they would also seems foolhardy to me.

That’s my two cents. What’s yours?

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73 thoughts on “My $0.02 on the Debt Limit Debate

  1. Vir Catholicus says:

    I think that too many people who call themselves “Catholic” have been duped into embracing a Socialist/Communist ideology when it comes to the Catholic Social Teaching in taking care and having a preferential optin for the poor. Every Pope since Marx published his communist manifesto has clearly and definitively articulated in official documents the fact that The Catholic Church does not and will not ever support Socialism in any way, shape or form. The Archbishop in this case was rightly called out for supporting Socialist ideology and should be publicly corrected by his brothers in the Episcopate.

  2. Kelly says:

    What bothers me in this essay is the use of the term “government” like it is some kind of foreign entity or the “them” in a kind of “us v. them” approach to solving the debt problem. We can’t forget that in a representative democracy the government is by the people, for the people, and of the people.

    “They” are not trying to take our money, “they” are “us” and this is a discussion (amongst the elected representatives of our different philosophies) on the extent and nature of publicly sharing and distributing our private money and resources for our common defense and welfare.

    Clearly the spending needs to be reigned in and clearly the wealthiest can and should contribute more to public resources that support our common welfare, since they have more to give and there are those in American who have nothing. I am grateful for the private giving the wealthy do, but I am also the government (the people) are involved in the redistribution of resources justly, and ideally voluntarily, taken from/given by the rich. This insures that a community, rather than just one member of that community, is allocating the resources.

    We should debate how to best spend our resources and gather and distribute them. So what is happening now needs to happen. I just wish it could be discussed in less of a us v. them approach to the government. In tough times, everything has to be open to cuts. But the answer isn’t to remove the state (that’s us) from the area of helping the poor – which would be the same as shooting ourselves in an already hurting foot.

    Federalist Food for Thought:
    “What is government itself, but the greatest of all reflections on human nature? If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary. In framing a government which is to be administered by men over men, the great difficulty lies in this: you must first enable the government to control the governed; and in the next place oblige it to control itself.” – Federalist 51

    Takeaway: Control how we gather our resources, then control how we allocate them.

    1. tex says:

      Kelly,

      I very much like your observation of the ‘us vs. them’ debate. You bring up some very good points, and I would like to bring up some more. For starters, our Founders did not seek to create a democracy, but a Constitutional Republic. The word “democracy” does not appear in the Constitution or any other founding documents. This wasn’t by accident. The Founders understood that a direct democracy would turn into a majority rule with the poor voting to steal from the rich every chance they could get. They knew this system of government wouldn’t last. They also were opposed to a monarchy who could steal from the poor every chance they could get. What made their idea of a Constitutional Republic so unique was that it did, in fact, draw a line in the sand between the people and the state, and did so on purpose. Unlike other governments, the United States was founded on the inherent distrust of the state, and as such, the Constitution was written to limit the power the state could have. Their vision was of a government that could neither veer towards direct democracy, nor towards monarchy. Instead, the role of government was clearly defined, changeable only by a constitutional amendment.

      If we look at the state of affairs we’re in, I would be willing to bet that in almost every case it is because we have drifted from the powers that were given to the state in the Constitution. We have drifted towards a direct democracy by creating social welfare systems that steal from the future, to give to the poor. And at the same time we have also drifted towards a monarchy were our state can steal from the people through taxation, bailouts and corporatism.

      So while I know that the discussion of ‘us vs. them’ seems antagonistic at times, it is only because that was the intent. We should consider ourselves blessed to have such a privilege.

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  4. Scott W says:

    For purposes of clarity…

    “Simply put, Congress must pass a bill by August 2nd allowing our government to take on more debt (by raising the debt ceiling) or we will “default” on our current debt.”

    Not quite. Ongoing revenue collection (taxes, fees, etc.) is more than enough to service the outstanding debt. In fact, there would be enough money to cover things like Social Security and paychecks to military families. It’s other discretionary programs that would be disrupted, amounting to a massive (net ~40%) spending cut. Painful? Yes. But the president chooses where it will hurt.

  5. kimberly says:

    The goverments job should not be to sustain people. It should provide a boost, a helping hand. The Church needs to stay within their budget. We all at some point can fall on hard times. Many hae lost jobs. When that happens their should be programs in place for people to go to to get assistance but not live off of. If you need to live off the assistance then there needs to effective programing to help those inviduals. I have seen people born into poverty or cycles of dependency on goverment programing. In the past I have worked in goverment paid programing and have seen tax dollars wasted on programs that do not work. My family needs to live within our means. The goverment needs to live within thiers. Not spending money they do not have. I wonder if Church’s and/or indvidual organization could do a better job of meeting the needs of individuals and provide better programing than the goverment.

  6. Michael B. says:

    Question for Thomas, et.al.: Capitalism is certainly a better system than socialism, but there are some flaws in the system in that modern business practices are centered on paying people the least amount of money for the most amount of work, and on ever-increasing efficiency rather than the dignity of workers and the families that they support. Also, the stock market system seems to force corporations to seek to deliver a rich dividend to their shareholders rather than give bonuses and salary increases to their workers, and the bigger a company gets, the greater the danger of treating workers as numbers rather than as real people with families to support. Additionally, most businesses now don’t pay people a wage that can support a spouse and children because they assume that both spouses work, and they don’t give bonuses and salary increases to hard-working people when they have another child, like they used to when my grandfathers were in the workforce.It’s also the case that a lot of people are now constantly on call, even on weekends, holidays, and vacation days, and can never get away from work, and I think that’s wrong. Moreover, I personally think that the free trade agreements we’ve approved were a raw deal that contributed to the net loss of a huge number of good-paying American jobs, particularly in industry, to other countries, through outsourcing. My question for all of you, therefore, is, how do we fix these flaws in the system? If we do that legislatively, that seems to necessitate socialism, which the Church condemns, but if we don’t fix the flaws in the system, we end up with problems like corporate greed and weakened families being unresolved, and I know no system will ever be perfect. I tend to favor distributism, because I think it’s the solution that would work the best and is heavily influenced by Catholic social teachings, but it is something that cannot be implemented legislatively, it needs to be done at a grass-roots level. I’m curious to hear what your thoughts are on this, though.

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