Here’s what President Obama said about a balanced budget for government:
“My goal is not to chase a balanced budget just for the sake of balance. My goal is, how do we grow the economy, put people back to work. And if we do that we are going to be bringing in more revenue.”
Let’s say you have a business checking account. Each month you spend more than you take in. In time, you are overdrawn. You have spent more than what’s in the account. Your bank calls and requires you to add money to the account in order to cover the checks you’ve written.
You say the following:
“My goal is not to chase a balanced budget checking account just for the sake of balance. My goal is to grow my business, hire more people. And if I do that, I’ll be bringing in more revenue.”
“That’s all well and good,” the bank manager tells you, “but not with our money. For what you want to do, you’ll need a loan. But given your poor accounting practices and deficit spending, we would not be able to loan you any money. Until you replenish your checking account, you will be charged significant penalties.”
This is how the real world works. You and I don’t have the luxury to spend more money than we earn. If we do, we’re most likely going to lose our house, cars, and other possessions, and maybe even go to jail.
Governments can get away with deficit spending because they can take money from people who actually earn money (taxation), or when the political cost of raising taxes gets too high, they can print money.
Too many voters are OK with deficit spending since they are often the beneficiaries. In reality, they are accomplices in a crime where the thieves are also the ones who write the rules and decided who to prosecute.
Consider these admonitions from some of our nation’s founders:
- “Allow a government to decline paying its debts and you overthrow all public morality — you unhinge all the principles that preserve the limits of free constitutions. Nothing can more affect national prosperity than a constant and systematic attention to extinguish the present debt and to avoid as much as possibly the incurring of any new debt.” — Alexander Hamilton.
- “Avoid occasions of expense . . . and avoid likewise the accumulation of debt not only by shunning occasions of expense but by vigorous exertions to discharge the debts, not throwing upon posterity the burden which we ourselves ought to bear.” — George Washington.
- “A departure from principle becomes a precedent for a second; that second for a third; and so on, till the bulk of society is reduced to mere automatons of misery, to have no sensibilities left but for sinning and suffering… And the fore horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression. — Thomas Jefferson
- “We must not let our rulers load us with perpetual debt.” — Thomas Jefferson
- “The consequences arising from the continual accumulation of public debts in other countries ought to admonish us to be careful to prevent their growth in our own.” — John Adams.
- “When you run in debt; you give to another power over your liberty.” — Benjamin Franklin.
Long before these guys wrote, there was this: “the borrower becomes the lender’s slave” (Prov. 22:7).
The United States may become a slave nation to China, who holds more than a trillion dollars of our debt.
“Other large foreign holders of U.S. debt include Japan, which owns $912 billion; the United Kingdom, which owns $347 billion; Brazil, which holds $211 billion; Taiwan, which holds $153 billion; and Hong Kong, which owns $122 billion.”