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. Katie says:

    Hi Tom!

    In re: Neither the rich nor poor got us into debt, the government did.

    This is a democracy. The people ARE the government. If we lose sight of that fact, we’re doomed to pointless arguments about what “government” is doing to “us.”

    And mightn’t it be slightly disingenuous not to acknowledge that, once all the votes are counted, it’s the wealthy who have a disproportionate share of power over lawmakers’ agenda?

    By all means, let’s resolve the debt issues and let’s reform our government. But God stands with the poor and so must we.

    Peace.

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