Our National Bankruptcy: Moral, Economic, and Political

Congress is gridlocked with the spigot of federal spending seemingly locked permanently into the wide-open position. What can be done?
Our National Bankruptcy: Moral, Economic, and Political
The National Debt Clock in Washington on Nov. 13, 2023. (Madalina Vasiliu/The Epoch Times)
Mark Hendrickson

Recently, I got a call from a friend who works in Congress. He was distressed by the absurd condition of the federal finances. How could the wealthiest country in the world be almost $34 trillion in debt while charging ahead into ever-deeper debt? It seems like a horror movie come to life.

Congress is gridlocked with the spigot of federal spending seemingly locked permanently into the wide-open position.

The conversation with my friend touched on three points: How did this untenable situation come about, how can we reverse course, and what model of government would protect us from endless debt?

How Did We Get Into This Untenable Predicament?

What has brought the federal government of the United States of America to the edge of a fiscal abyss? It boils down to two main factors: the perverse incentives of electoral democracy accompanied by a gradual moral decay.

The fundamental underlying cause of our catastrophic debt is a decay of morality. Over the decades, the traditional American respect for the sanctity of private property has eroded and diminished. Under the influence of progressive and socialist ideas and other sophistries, the American people came to believe that they were entitled to receive benefits that others would be made to pay for. This is the self-destructive nature of democracy. By popular demand as expressed at the ballot box, voluntary exchange and charity have been progressively replaced by compulsory government-mandated transfers of wealth (transfers of wealth that would be considered theft if done by nongovernment actors).

In a democracy, politicians seeking elective office always need more votes. They have found that they can buy votes, not with their own money, but with money from the federal treasury, by conferring ever-larger benefits on ever-more beneficiaries. The political incentive is for Congress and presidents to spend, spend, spend. And since voters hate taxes, another political incentive is to not antagonize voters by raising taxes. Running up the national debt is the inevitable outcome of these incentives.

Government overspending is the Achilles’ heel of democracy. In words often attributed to Alexander Fraser Tytler, “A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship.”

Twentieth-century American economist Howard Kershner put it less eloquently: “When a self-governing people confer upon their government the power to take from some and give to others, the process will not stop until the last bone of the last taxpayer is picked bare.”

How Can We Pull Out of This Fiscal Tailspin?

The short answer is: We can’t. Theoretically, it would be possible if a majority of voting Americans recognized the dangers inherent in national bankruptcy and elected presidents and a Congress that would undo the vast web of wealth-transfer programs, but this isn’t realistic. Few voters are willing to relinquish the particular government programs that benefit them, and so dismantling the welfare state voluntarily is a nonstarter.
Instead, the most likely scenario is to continue on our present self-destructive course until the point in time when there won’t be enough suckers who believe in “the full faith and credit of the federal government” to buy its debt, and the Federal Reserve is forced to create additional trillions of dollars, thereby torpedoing the purchasing power of the people and precipitating an economic cataclysm causing massive social upheaval and a likely political revolution.

A Blueprint for a Fiscally Responsible Government

Yes, and it’s a blueprint sitting in plain sight. It’s our Constitution.

The Constitution enumerates a relatively small number of functions that the federal government is to perform. There’s no explicit authorization in the Constitution for the federal government to get involved in directing, influencing, or managing such areas of our economy as agriculture, housing, health care, energy, education, transportation, retirement, etc.

It’s clear from the writings of the founding generation that they never expected the federal government to extend into the economic affairs of citizens.

Thomas Jefferson, in a letter to Albert Gallatin in 1817, said, “Congress has not unlimited powers to provide for the general welfare, but only those specifically enumerated.”

Chief Justice of the Supreme Court John Marshall (McCulloch v. Maryland, 1819) said, “This government is acknowledged by all, to be one of enumerated powers.”

James Jackson, member of the First Congress, said, “We must confine ourselves to the powers described in the Constitution, and the moment we pass it, we take an arbitrary stride towards a despotic Government.”

What happened to our founders’ vision of limited government? Again, the moral decay of “We, the people” bears the primary responsibility. President John Adams hit the nail on the head: “Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other.”

What President Adams understood is crucial. Any constitution—even one that expresses the most noble ideals and enlightened ideas—is little more than a piece of worthless paper if the people don’t value it enough to accept its authority and lack the commitment to consistently accept, uphold, and defend its strictures and rules.

We need a blueprint like our original Constitution. But more than that, we need a moral revival so that we can again live as free people under a federal government limited to the task of defending our lives, liberty, and property.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times.
Mark Hendrickson is an economist who retired from the faculty of Grove City College in Pennsylvania, where he remains fellow for economic and social policy at the Institute for Faith and Freedom. He is the author of several books on topics as varied as American economic history, anonymous characters in the Bible, the wealth inequality issue, and climate change, among others.