On federal spending, the US bishops' advice fails a moral test

By Phil Lawler ( bio - articles - email ) | May 15, 2012

Do the American Catholic bishops think it’s morally acceptable to bounce checks? Because that’s what will happen, you know, if Congress follows the bishops’ advice on federal spending.

The US Conference of Catholic Bishops has repeatedly criticized proposed budget cuts in federal spending, without suggesting alternative ways to balance the budget. Although in these statements the bishops occasionally mention in passing that they recognize deficit spending might be a problem, those disclaimers are never very convincing. There is no sign that the US bishops, as a body, recognize the enormity of the central problem here:

The US government is spending money that it doesn’t have.

When you insist on spending more money than you bring in, and you can’t fall back on savings, you have two options: You can borrow money, or you can write bad checks. If you can’t find lenders willing to extend you credit, you’re down to one option. The US government is approaching that morally catastrophic position at an alarming rate, and the US bishops’ conference is encouraging Congress to press down on the accelerator.

The bishops’ statements, encouraging support for various welfare programs, are based on the premise that the US government can afford to spend money to care for those in need. In cold, hard, economic terms, the US government can’t afford anything. After decades of ambitious government spending programs, Americans have grown accustomed to thinking that the federal government has enormous sums at its disposal—so that whereas you and I can’t afford to help the poor, Uncle Sam can. That’s simply wrong. You and I have more money than the federal government. You and I are in a much better position to help the poor—even in monetary terms—than the massive bureaucracy in Washington.

We usually think of ourselves as people of limited means, and of the federal government as a financial colossus, with plenty of money available to spend on our favorite programs. But in reality the US government has less money than we have. In fact the US government has less money than anyone on earth; the federal government is the most impoverished institution in human history!

Think about it. If your financial assets exceed your liabilities you are (relatively speaking) wealthy; if your liabilities exceed your assets you are (relatively speaking) poor. The liabilities of the US government exceed its assets by trillions of dollars. (There’s no use trying to calculate the exact amount, because the figure will rise by billions of dollars in the time it takes you to do the calculations.) There are no plans circulating in Washington that would eliminate, or even decrease, the net federal debt. The Republican budget plans, to which the US bishops have taken such exception, would merely slow the rate at which the continued deficit spending flows into the seemingly fathomless sea of red ink.

The US bishops’ conference has charged that Republican budget proposals are morally unacceptable because they do not maintain adequate funding for programs that help the poor. But any budget proposal should be judged against another moral test as well: the test of basic financial prudence.

Imagine that a certain man, Mr. X, is a fine Christian gentleman, with modest means, generous impulses, and chaotic habits. X wishes to help his needy neighbors, and so he writes large checks to a local charity. (We’ll take it for granted here that the charity does a good job in helping the poor—just as the bishops take it for granted, with much less reason, that federal programs are effective in easing poverty.) There’s a problem: X does not have enough money in his bank account to cover those checks. But have no fear! He has credit-card account that protects him from overdrafts, and his “deficit spending” is rolled into a revolving-credit account that increases, at a high interest rate, indefinitely. Eventually his heirs will be forced to pay off the debt, or the bank will take a big loss for being foolish enough to furnish this spendthrift with unlimited credit.

Now would you regard Mr. X as a generous man? As a prudent man? As a responsible steward of his own resources? Would you say that his generosity toward the local charity is admirable? If not, please explain how his spending habits differ from those the American bishops have suggested for the federal government.

The game can’t go on forever. Eventually the bank would close down Mr. X’s line of credit, and his checks would begin to bounce. For an institution as powerful as the US government the rules may be suspended for a long time, but those rules cannot be abolished. Sooner or later—much later, admittedly, for Uncle Sam—checks must be honored; debts must be paid.

This week we are watching anxiously as the Greek government teeters on the brink of financial collapse. The notes are coming due; will the Greek government honor them? Or will the leaders of Greece admit, in effect, that they have been writing bad checks for years?

The crisis is not yet imminent for the US, but it is clearly approaching. If the American bishops persist in advising Congress to increase welfare spending, they have a moral obligation to explain how the debts will be paid.