Saturday, July 30, 2011

George Monsma and others on the debt ceiling

Our own George Monsma, and our neighbor economist Todd Steen have weight in on the controversy surrounding the debt ceiling. Both appear in Capital Commentary, published by the Center for Public Justice. Both provide well-reasoned arguments and good economic sense in the midst of an increasingly ugly national debate.

Here are some gems. First Todd explains the long term importance of the debate, without resorting to the end-of-world rhetoric that is too common:
As we examine the implications of public justice regarding the negotiations over the debt ceiling, we must be careful not to define justice solely with regards to the situation of our current generation. This mistake has led us to overemphasize current conditions at the expense of the future. We have come to believe that we can justify limitless borrowing to provide additional health care, defense spending, retirement provision, and lower tax rates. Running a budget deficit every year, however, whether the economy is growing or in recession, steals possibilities from those in the future, especially from the poor. Interest payments become an ever increasing part of future budgets, crowding out choices for future generations.
And here is George giving some basic principles to frame the debate:
Governments are called, where possible, to establish conditions in which other institutions in society can fulfill their God-given callings, and in which this can continue in the future. Families should be enabled to support themselves through their work and have access by other means to what is necessary to fulfill their callings in society when they cannot support themselves by work. Government should provide this now, as well as enable this to continue in the future, e.g., by giving families access to education needed for earning in the future, by preserving the environment and natural resources so that society can flourish in the future, and by not burdening those living in the future with debts in excess of what is passed down to them in assets from such a productive infrastructure.

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