National debt: an immoral deception

By Matt C. Abbott

In his latest e-column, Monsignor Ignacio Barreiro-Carámbula, interim president of Human Life International, writes (excerpted):

'As August 2nd nears; that is, the date the administration has set as a deadline to reach a compromise on raising the nation's debt ceiling, we have to ponder carefully the morality of national debt. As a pro-life and pro-family organization, we have the right to meditate on this fundamental issue because the constant deficit expansion and accumulation of debt have a profoundly negative effect on families and their God-given task to raise children.

'Since World War II, Congress has voted many times to raise the ceiling. Some journalists have pointed out that the White House and Congress alike have treated the matter as a routine part of keeping the government functioning. But it stands to reason that we should ask ourselves if this is a good habit, as public debt has increased to unmanageable levels that could very well lead to bankruptcy. It should be evident to the most casual of observers that debt cannot be accumulated forever — eventually it will reach a weight that is unsustainable and will lead to a default.

'As we know, the essence of public debt is that it allows the real payment of current commitments to be postponed. This can be done properly in emergency situations, as in the case of a just war or natural catastrophe, or urgent capital projects like roads or dams that will benefit future generations. But it can never be the way in which government finances normal consumption or welfare projects. This debt is financed with loans from persons or institutions (such as foreign governments), and in the future they will receive back their investment plus interest.

'Here we can see an initial problem — investors are incentivized to lend to the government instead of investing in productive business. These lenders will be repaid from the proceeds of future taxes; not, as they would be in the case of business investment, from growth in productivity and sales revenue. Future taxpayers will pay for today's debt-financed public expenditures and bear its real burden.

'The accumulation of public debt is offensive against one of the pillars of the American Republic, which is the refusal of taxation without representation. Future taxpayers will be burdened with the payment of taxes on a debt which they had no say in acquiring....

'In this debate some argue that the issue is far too critical for it to be debated politically. They say that it stands to reason that national debt, the national budget, and the taxes to pay for it are so basic as to be only discussed in terms of the common good of the nation. It seems quite unreasonable, however, that members of a certain ideology — those who have proposed and obtained the legalization of all sort of immoral conducts, like abortion or the so-called 'marriage' between persons of the same sex — would try to stop political debate on an issue that is indeed political in a republican form of government.

'Political society has the right and duty to analyze the moral implications of its actions. As a consequence it has to analyze the morality of deficit expending and its consequence which is the accumulation of debt. The Church also has the right to express her views on the common good of society, thus she has a position on national debt, even if she avoids giving financial advice in specific situations....

'So it should be clear that the accumulation of public debt is immoral in itself because it is a form of stealing, keeping in mind the old saying that robbery is without any doubt one of the oldest of labor-saving devices....'

To read Monsignor's column in its entirety, click here.

I asked Catholic scholar and law professor Brian M. McCall for comment; he responded:

"I completely agree with Monsignor's analysis of the morally corrupt nature of our debt-riddled government. The problem, though, is much deeper than his analysis indicates. Our entire monetary system is based in debt. All U.S. dollars are created as debt, which needs to be repaid to the banks that create it. Since these loans bear interest, the money supply must constantly increase to include the interest from the last round of loans.

"This unholy cycle is what has literally addicted the government and private entities to a continuing debt cycle. Without new debt money to service the old debt, the system implodes. This observation led the eminent theologian and economist Bernard Dempsey, S.J., to remark over seventy years ago that we live in a system of institutional usury. Breaking an addiction is difficult and painful, but it is one our society must break — not just by 'cutting the budget,' but completely restoring the monetary system to one based on productive wealth, not debt."

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Pertinent link:

Human Life International

© Matt C. Abbott