Category Archives: National Debt/Deficit

Leave it to our Grand-kids; the Immorality of our National Debt

Our national debt is $16.75T, our unfunded liabilities are ~ $120T, and President Obama says we have no debt crisis.  In a post last week on the national debt and deficits, I promised we’d discuss the morality of passing the debt burden on to our grand-kids.  As is often the case, our moral senses are corrupted by Keynesian economics when thinking about the national debt.  After all, in the Keynesian world that almost all Washington DC lives in, savings and… Continue Reading ››

Sequestration Madness

Left-leaning author and editorialist Bob Woodward ’s recent criticisms of the Obama administration’s role in precipitating the sequestration debacle resulted in a response from National Economic Council director Gene Sperling.  While Woodward suggested on a television talk show that Sperling had threatened him in an email, subsequent revelations called that assertion into question.  While Woodward should be more careful, it is interesting how quickly the forces of the left turned on one of their own.  Woodward’s op ed piece in… Continue Reading ››

Are deficits really good for our economy?

They are; at least according to Charles DuBois in his letter to the editor in the Wall Street Journal. Mr. DuBois says, In brief, the near-term impact of deficit spending is for the private sector to incur one debit (to buy the bonds) and two credits—one for receiving the bonds and one for receiving the deficit payment. Of course, there must be a debit for every credit, so the “missing” debit is the increase in the federal debt. However, over the… Continue Reading ››

“The Path to Prosperity” and Biblical Principles for Welfare Reform, Part 2

In a comment to a post I made yesterday, Jeff Haymond asked “Can you speak to what the biblical vision would be and why Representative Ryan’s proposal has at least parts that fit that vision?“. I’d like to respond to Jeff’s first question by summarizing welfare reform architect Lawrence Mead’s From Prophecy to Charity: How to Help the Poor[i] pages 54-63 and address his second question by looking more closely at the proposal. New Testament teaching helping the poor is… Continue Reading ››

“The Path to Prosperity” and Biblical Principles for Welfare Reform

On March 12, the House Budget Committee released its Fiscal Year 2014 Budget Resolution “The Path to Prosperity: A Responsible Balanced Budget”. A key provision in the proposal is the “Safety Net Strengthened” (p. 25). Using reform of Aid to Families with Dependent Children (AFDC) as a model when “Bipartisan efforts in the late 1990s transformed cash welfare by encouraging work, limiting the duration of benefits, and giving states more control over the money being spent.“, the current House proposal… Continue Reading ››

President Obama: There Is No Debt Crisis!

That’s the headline of this report from ABC News.  Today, the U.S. National Debt is $16.7T, whereas our 2012 GDP was $15.6T, or our debt/GDP ratio is 107%.  Economists Carmen Reinhart and Ken Rogoff  have shown that when debt levels are greater than 90% of GDP (for advanced economies), economic growth slows. EDIT Jun ’13:  There has subsequently been much controversy over a spreadsheet error in R&R’s calculations for the 90% # highlighted above.  Despite this error, the general conclusion… Continue Reading ››