Dear Chuck,

I read that America has dangerous levels of federal debt but also read that it really doesn’t matter. Which is it? And what should I do about it?

Worried Taxpayer

Dear Worried,

America’s federal debt has recently swelled to twenty-two trillion dollars. Those are numbers that were once used only in the field of astronomy.  

This is a confusing topic because it is impossible to accurately predict a tipping point for our national debt. The danger lies in our ability or inability to respond to a future crisis. It is my opinion that regardless of our government’s debt, believers should manage their finances in a way that honors the Lord: prepared for a crisis and not living dependent on the government.

Some make the argument that our debt doesn’t matter because America has an advantage over many nations. We have abundant natural resources, one political system, one monetary system, one primary language, fairly peaceful neighbors, and a population that all grant confidence for foreign investors. All true.

Our government debt is not an immediate concern for many because interest rates are low. However, if our lenders ever lose confidence in the good faith and credit of the U.S., then our debt could actually become a real threat. There are those who believe the Modern Monetary Theory in which a government in control of its currency just prints more as needed. Deficits don’t matter to MMT-ers, because the government can’t go broke. So they believe.

Despite the Naysayers, Debt is a Real Concern

Pete Peterson, for Newsweek in 2009 stated,

For years, I have been saying that the American government, and America itself, has to change its spending and borrowing policies: the tens of trillions of dollars in unfunded entitlements and promises, the dangerous dependence on foreign capital, our pitiful level of savings, the metastasizing health-care costs, our energy gluttony. These structural deficits are unsustainable.

Martin Crutsinger, at apnews.com, wrote:

The national debt is the total of the annual budget deficits. The Congressional Budget Office projects that this year’s deficit will be $897 billion – a 15.1 percent increase over last year’s imbalance of $779 billion. In the coming years, the CBO forecasts that the deficit will keep rising, top $1 trillion annually beginning in 2022 and never drop below $1 trillion through 2029. Much of the increase will come from mounting costs to fund Social Security and Medicare as the vast generation of baby boomers continue to retire.

Binyamin Appelbaum, with the New York Times, reported:

Economists have warned that government borrowing would limit private sector borrowing, which would constrain economic growth; that it would drive up inflation; and even that the government might find itself unable to borrow, if creditors presumed the United States was too deep in debt and might be unable to make interest payments or repay its liabilities in full.

Michael A. Peterson remarked that the federal debt “threatens the economic future of every American” when the $22 trillion milestone was crossed.

And, yet, investors still have confidence in the power of the U.S. economy. Bob Doll’s Weekly Investment Commentary for Nuveen states:

Rising debt issues are a concern but fundamentals still look decent. The overall debt profile of the U.S. government is worsening, which could present significant economic issues over time. But household and corporate debt levels are healthy, and we don’t think we are entering an environment of serious credit issues.

The Bible Warns Against Debt  

The rich rules over the poor, and the borrower is the slave of the lender. (Proverbs 22:7 ESV)

For the Lord your God will bless you as he has promised, and you will lend to many nations but will borrow from none. You will rule over many nations but none will rule over you. (Deuteronomy 15:6 ESV)

And you shall lend to many nations, but you shall not borrow. And the Lord will make you the head and not the tail, and you shall only go up and not down, if you obey the commandments of the Lord your God. (Deuteronomy 28:12b-13a ESV)

It is easy to see the speck in government spending, but fail to see a log in our own eyes. Consider these recent statistics on personal debt in America:

• The average American holds more debt today than they did a decade ago  
• Total student loan debt totals $1.56 trillion
• A record number of Americans are behind on car payments

Is our leadership influencing the populace? Does a government that runs on borrowed money endorse its people to do likewise? How would this nation look if it ran contrary to that fact; a nation with reserves protecting its people and prepared for unexpected emergencies?

It is easy to cast stones at the government’s debt and ignore our own. Americans in general have financial issues. We must ask ourselves if we are influencing culture or whether the culture is influencing us.  

Compare our government and personal debt to a volcano. It can appear beautiful from a distance, but stretching far below the surface, hidden channels of hot magma are accumulating. Pressure is building, and at some point, the stress becomes so great that it erupts, and anything in its path gets burned.

Volcanologists can predict eruptions if they understand the volcano’s history and can monitor data from properly installed equipment. Even then, it is not possible to accurately predict the severity of the eruption.

So regardless of whether our government ever stops piling on more debt or will one day rein it in, we need to manage our personal finances in such a way as to reflect the wisdom of God. Minimize your personal debt, increase your savings, and lay up for yourselves treasures in Heaven where you have a guarantee on the safekeeping of your investments.

If you need to take the first step towards paying off overwhelming credit card debt (hopefully it’s still less than $22 trillion), get in touch with our friends at Christian Credit Counselors. We trust them because they help you attack your debt the right way. Over 300,000 families have already lifted the burden of credit card debt with their help, and you can, too!

Originally published on the Christian Post, March 8, 2019