On "The Good and Bad Economy"
Michael Crowley’s entry into this week’s TIME magazine, “The Good and Bad Economy” outlines the difficult agenda of economic recovery facing the Obama administration as it deals with not only conflicting economic data but also with an electorate sharply divided philosophically on how to end the current recession. There is a looming fear of the “double dip,” that after some signs of growth our nation’s economy will shrink once again. Although the nation’s economy has “double dipped” a few times since, the dreaded “double dip” is most often associated with 1937 “when a U.S. economy fighting its way out of the Great Depression crashed a second time, requiring the massive industrial effort of World War II to rejuvenate it.” In any historical period the “double dip” signals a long excruciating recovery from recession.
Even after an $862 billion stimulus package, soon to run out, the economy remains in peril. The Obama administration, left minded economists, and Democrats believe that without more government stimulus spending, massive layoffs and budget cuts are a certain future. “But Obama and his advisers know their hands are tied. Polls show that voters either don’t understand – or don’t buy – the long established economic theory of John Maynard Keynes, which calls for more government spending (even if it means running up deficits) to help the economy through hard times. Instead, the public is in the mood to smack big Washington spenders hard this November.”
There are two assumptions that permeate this entire article: 1) If you are against the left/Obama/democrat agenda for economic recovery it must be because you are ignorant and 2) the government is the only answer. I resent both of those assumptions. True, I do not know who John Maynard Keynes is, but I manage a church budget and most of the people in our congregation manage their finances both at home and in business. From my own experience borrowing money may serve as an immediate stimulus to my living room or my driveway, but borrowed couches and cars come with much larger price tags and longer periods of payment than ones paid for with actual cash. I understand this reality clearly. While the working man may not understand macro-economics, he is forced to manage his own paycheck week to week; if indeed he is currently drawing one at all. It is presumptuous to assume that if the electorate “smack big Washington spenders hard this November” that they did it without really knowing why.
The Bible has quite a bit to say about economics both at a personal and national level. People need jobs. Man is meant to work. None of us should expect something for nothing (2 Thessalonians 3:6-12). The entitlement philosophy that pervades our current culture is burdensome, debilitating, and an economy killer. People need to work. Indeed this is the central burden of the recession. How do we put Americans back to work?
The Bible outlines two approaches, one Egyptian (sort of) and the other Jewish. According to Genesis 40 and 41, Joseph (serving as Prime Minister of Egypt at the time) interpreted dreams that led to the nation storing up during 7 years of prosperity. Good economics. After prosperity, there was famine. In an agrarian society famine=recession. When 7 years of famine struck the land the people ran out of money. To stimulate the economy the people exchanged their personal wealth and businesses (land, livestock, etc.) for a government bailout check. The end result was a massive exchange of private ownership for government control (Genesis 47:23-26). When the government is the answer to recession the result is an exchange of power, from private ownership to federally funded, heavily taxed, and regulated institutions. Those who are against the left/Democrat/Obama doctrine of recovery via government spending are not ignorant, but fearful of a less privately owned and more government controlled America. What has happened to the banking system in recent days is only a first fruit of what could come from reaping such philosophy. It is the slow, methodical death of the private sector and the expansion of government.
The other Biblical paradigm is the Year of Jubilee outlined in Leviticus 25:13-17. The economic philosophy of Leviticus 25 guaranteed there would be no bad loans. It protected both the lender and the borrower. The idea here also emphasized private ownership and personal worth. It gave people a right to wealth while at the same time protected the poor and encouraged generosity. Instead of penalizing success it created a climate in which everyone had an opportunity to succeed. To recover or to succeed, one needed only an opportunity to work.
The government, through regulation and deregulation creates an economic climate. Yet, Biblically speaking it is not the duty of government to create wealth, it is rather the duty of government to punish evil, protect human life, and assure its citizens that they can live quiet and peaceable lives (Romans 13:4, 1 Timothy 2:2). When the government becomes the coffer of the people the end result is an undue tax burden, the exchange of private wealth for government control, and people who either do not have a mind to work or who do not have the opportunity to work. People need loans, fair ones, private ones instead of government ones. Much of this recession can be blamed on bad loans created by a bad governmental ideology. Why repeat what has already failed? These loans not only put the lender at risk, but the borrower as well. The greatest evidence of this is in the collapse of the housing market. Instead of more stimulus spending and loans for bureaucratic pet projects, American business needs less of a tax burden and more opportunity to employ people who can, in the spirit of Leviticus 25, relieve themselves of debt (from good loans), work in the private sector, and build personal wealth.
Biblically speaking the path to recovery is through hard work, not government bailouts and stimulus spending. According to Biblical texts like Genesis 47 and the lessons of history at large, the American people have every right to fear big government spending. It is not an issue of ignorance, but one of precedence.