Wednesday, March 22, 2023 -
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Faith-based economics

“Sensible men pay respects to the gods for the good of their fruits and crops and cattle and horses and sheep and indeed all of their possessions.”
— Xenophon, Oeconomicus, 4th century BCE

In the ancient world, divine intervention was perceived to be as integral to the economy as fiscal and monetary policy are today. They believed economic stability was interconnected with religious faith. In our time, while economics is a field of scientific study, the bedrock of economic stability is still faith-based. The difference is that instead of looking to the heavens, it is our faith in the economy itself that matters most.

“The only thing we have to fear is fear itself.” With this famous line, President Roosevelt sought to reassure Depression-ridden people that recovery was possible if faith and trust in the systems that had failed could be restored. He understood that faith in our systems of government and oversight is so powerful that we literally cannot live without it.

If you use cash, and maybe even more so if you don’t, you are among the faithful. The only reason you can exchange a piece of paper or tap a piece of plastic to buy a cup of coffee, sell a house or take over the Denver Broncos is because you believe that there is value in the money exchanged.

Money has no intrinsic value whatsoever. Its value depends on its backing by the full faith and credit of the US government, which in turn depends on people believing that the full faith and credit of the United States is meaningful. To date, faith in this principle has been so strong that transactions world-wide occur because of it. Global stability even relies on it.

When something is this important, it should be unnecessary to say that it ought to be vigorously protected. When something is this important, it should be unnecessary to say that any person elected to public office in the US ought to consider it their duty to protect it. But, somehow, it remains necessary to say it.

The congressionally imposed debt limit is one of those things that is, and should be, so boring that you never hear about it. It’s a technicality created near the eve of WW II for the purpose of making it easier for the country to borrow money, not as a cap or even a guideline about spending.

Using it as a tool to score garbage time points in a political game is reckless.

In one of the bills offered by Republicans to end the 2013 debt limit standoff, the Full Faith and Credit Act acknowledged that the political gamesmanship delaying the raising of the debt limit caused the federal government to engage in “extraordinary measures” to avoid exceeding the debt limit, which is the same thing that is happening today. The bill explains, “these measures temporarily forestall the need to exceed the ceiling by shuffling funds among accounts, as well as suspending certain payments and programs.”

Have you ever tried to collect a debt from someone who said, “I just need to move some money between accounts and then I’ll pay you?” Does the word “deadbeat” come to mind?

Worse, as bad as it is to try to collect from a deadbeat who is broke, what about one who could easily pay you, but just won’t? It is pretty hard to place additional faith and trust in such a person.

The current standoff over the debt limit will probably get resolved, most likely at the 11th hour, either because the Republicans cave like they did the last time they manufactured a debt crisis or because they will wring meaningless concessions from the Democrats that will do nothing to change the trajectory of our debt, because it won’t address Social Security, Medicare, Defense and taxes, which are the only parts of the budget that can have any true impact on total spending and debt.

The real problem is not that that the country will default on its debt (at least I hope no one is that dumb), it is that too many of our elected leaders and candidates for office use their stature to assail the integrity of the very institutions they are charged with preserving.

It used to be Bernie Sanders who stood on the fringe and manufactured straw men to argue that the economy is “rigged” by the banks, or the 1%, or Wall Street, or whoever was the facile target at the time.

Then, Donald Trump indefatigably rose to power by attacking pretty much everything as being rigged or corrupt. He and his acolytes decried the FBI, the CDC and the National Institute of Health, any person, state or agency that wouldn’t bend to their will, and of course their lies about rigged elections to undermine democracy as a whole.

It’s enough to make one wonder how much of this assault from within can a system that depends absolutely and vitally on faith and trust, endure?

In recent years, our system of government and our economy have proven incredibly resilient while defending itself from these kinds of fifth-column attacks. Such continual assaults remain worrisome, however, because as strong as our systems have proven themselves to be, the outcome of any particular crisis or attack is still unpredictable. Election deniers, the January 6 horde, and manufactured debt crises that hold the nation hostage are not conducive to building stable national institutions that are the true strength of the US.

“Sensible men pay respects to the gods.”

Pardon the polytheism of course, but there is a valuable lesson here. There is a dearth of sensible people walking the halls of Congress, and at this moment they are especially heavily concentrated on one side of the aisle.

It is time for certain members of Congress to stop playing games with the foundation of the American economy and political system and to begin paying homage to its importance rather than continually trying to destroy it.

Copyright © 2023 by the Intermountain Jewish News

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