Perhaps since the dawn of humanity, we have been lured into, and cursed by the ubiquitous debt trap! What is it about human nature that we find debt so incredibly tempting, despite so many examples around us of people, organizations and governments who/that have succumbed to it? Could it be mere human pride—‘THAT won’t happen to me!’, or possibly …something much more sinister?
Human Nature Never Learns!
Humanity has become extraordinarily SMART at borrowing, but apparently not yet WISE enough to learn from thousands of years and current experiences with the consequences of unwise debt decisions. Across history, sovereign (public sector) debt has reigned supreme as a key factor in the collapse of nations, and especially empires! Ancient kings borrowed heavily to finance wars, expand empires, develop massive infrastructure, and above all, to maintain their power. Modern governments borrow to finance wars, public services, infrastructure, and finance unaffordable promises that help politicians win elections.
That’s across different millennia and centuries, different technologies, different institutions, but the SAME OLD HUMAN NATURE! Despite our exceptionally intelligent economists, incredibly smart computers, complex financial models, powerful central banks, and massive armies of fiscal experts, governments continue to accumulate obligations that succeeding generations must confront, and most might never be able to repay. WHY?! Could it be because governments MAGNIFY the many weaknesses of citizens who elect them?
What Politicians LOVE
Borrow and spend today!
Claim credit right away!
Increase voters’ affection!
THEN WIN THE NEXT ELECTION!
Why raise taxes or make politically painful choices, when borrowing can postpone the reckoning that politicians themselves will never have to face?? ‘Kick that can down the road’ for another administration and another generation to deal with! In 2018, The Daily Beast (an American online news publication) reported that, when shown projections of mounting national debt beyond his potential second term as U.S. president, Donald Trump, reportedly responded,
‘Yeah, but I won't be here!’
His response perfectly illustrates the ubiquitous, political temptation:
Enjoy the benefits of borrowing now.
Let others deal with the consequences … later!
Ancient Warning, Ignored!
Thousands of years ago, The Bible and history warned, and history confirms:
• Heavy dependency on lenders may be a form of Heaven’s judgment. (Deuteronomy 28:43–44)
• Debt, taxation, and economic distress can trigger families to mortgage property and lose financial freedom. (Nehemiah 5:1–13)
• Folks who acquire unjust gains and burdensome pledges face potential reversal. (Habakkuk 2:6–8)
• Fiscally-steward people are thoughtful to support , not burden, future generations. (Proverbs 13:22)
Of course, not every debt crisis stems from recklessness, nor is all borrowing is harmful. Wise, productive investments can justify their costs. That distinction makes responsible stewardship MORE necessary, not less! Unwise public sector decisions that accentuate borrowing, rather than taxing those who are currently able to pay (a) sustain current income inequalities across societies, and (b) burden future generations who will have had no ‘voice’ in debts they will inherit.
I think it’s past time for us to learn to ‘flip the script’ on unwise, sovereign debt. In Part 2, let’s consider how we might do that.
