US government deficits entail a moral risk
If your neighbors know that you're living far beyond your means, they're not likely to recognize you as a moral authority. That principle applies to nations, too. Lech Walesa has questioned how long the US can remain the leader of the free world while racking up huge debts, year after year. Now with the federal government projecting massive deficits every year into the distant future, the moral cost of debt is becoming evident.
Writing in the Wall Street Journal, Judy Shelton (the author of Money Meltdown) explains how America's economic problems undermine American foreign policy. She notes that China is hinting that if President Obama goes through with a scheduled meeting with the Dalai Lama, Chinese investors might think twice about continuing to buy US Treasury bills. China is already the world's largest holder of IOU notes from Uncle Sam. If Beijing cuts back on its lending to the US, the Treasury will feel the sting. As Shelton puts it:
China sees a clear link between America's ability to stand up for human rights and its economic interests—and Beijing isn't afraid to exploit it.
Ordinarily we don't notice a connection between the government policies that promote human rights and those that promote economic growth. But the connection is there. Again Judy Shelton puts the matter succinctly:
Unless we quit our debilitating borrowing habit, we will not be able to overcome the timidity that comes from being reliant on the kindness of strangers. Standing on our own two feet is the only way to ensure that we stand on principle.
All comments are moderated. To lighten our editing burden, only current donors are allowed to Sound Off. If you are a donor, log in to see the comment form; otherwise please support our work, and Sound Off!
Posted by: fenton1015153 -
Feb. 22, 2010 11:37 AM ET USA
There is also the problem of usury. The Federal Reserve, a private entity, loans money to our government. Where does the FED get its money? The FED creates the money out of thin air and charges interest on their creation. Usury by any other definition. Governments need to free themselves from debt based financing. It used to be the money of the USA was backed by the full faith and credit of the American people. Now it is backed by nothing from which it is created.
Posted by: Frodo1945 -
Feb. 20, 2010 9:52 AM ET USA
I don't know what a 'moral risk' is, but I think it is an immoral act to vote to spend money that our children and grandchildren will have as their debt. What an inheritance the politicians are giving the next generation, an enormous debt!!! Any American with an ounce of conscience remaining should give these bums the heave-ho.
Posted by: -
Feb. 20, 2010 12:44 AM ET USA
Well, "Moral" leadership seems to be a thing of the past in western societies, so why worry about it? And, this very disappearance of morality is the reason our debt-to-worth ratio has tanked. For decades, the brute economical power (relativity speaking) of the U.S. has made the other "western" societies emulate our faults. Anyone who has been paying attention to something other than what is showing on television should be able to see what we have been doing to ourselves these past decades.