Reversing America's Culture of Debt

Reversing America's Culture of Debt

By Ken Blackwell - April 8, 2009

America was built on individual opportunity. This is the core of the economic conservative agenda. The family unit is the core building block of American society. This is the heart of the social conservative agenda.

There is a key overlap here that many conservatives--and even their leaders--overlook. Living within your means and managing your finances to avoid long-term debt is part of building strong families, providing for your children and teaching them to provide for themselves.

I recently attended a lecture given by Charles Murray at the Annual Meeting of the American Enterprise Institute (AEI), in which he said that the only four human institutions characterized by deep personal satisfaction are family, community, vocation and faith. Mr. Murray argues that the goal of social policy is to ensure that these institutions are robust and vital.

Many people have heard of Adam Smith's most famous book, The Wealth of Nations, which helped lay the foundation for free market systems and classical economics. Fewer people have heard of another of Adam Smith's books, The Theory of Moral Sentiments. He argues that humans possess a moral sense that causes us to approve certain actions while condemning others. The grandfather of modern economics believed that a sense of morality was necessary for a society to flourish.

Both economic and social conservatives need to grasp the common ground here. Strong families are essential to strong economies, and financial management is a key family value.

Recently, America has been moving from a culture of ownership to a culture of debt. People went from wanting to own their home and car and have enough for retirement to making monthly payments on everything they consume while relying on someone else (the government) to pay all the bills when they get older.

As others have said, the president's agenda would bury our children and even our grandchildren under a mountain range of debt. President Obama is saddling people who have not yet even been born with debt incurred by spending wealth that has not yet even been created.

One of the most alarming aspects of this situation is that few people are talking about what these policies are doing to our children's worldview. If left unchecked, these policies will cause a generational paradigm shift.

These policies are a Trojan horse creating not only a mentality of government reliance, but also a mindset where a lifestyle of permanent debt is acceptable. Not long ago, someone paying massive interest to finance things they couldn't afford was looked upon as irresponsible, and their behavior shameful.

Now, instead of debt being an unfortunate necessity for massive purchases like a house, everything is being financed by interest-bearing debt. If you can't afford something, don't save up until you have the money, just put it on a credit card and pay 12% or 20% interest for years. This interest can double the sticker price, cutting in half people's purchasing power and plunging them ever-deeper into debt.

For purchases like a house, many are leveraging themselves out as far as the bank will allow, rather than exercise self-restraint. A person who can responsibly afford payments on a $200,000 house is now more likely to get a $400,000 house, put other expenses on a credit card and barely make the minimum payments. It's the people engaging in such behavior who got swamped when the housing bubble burst.

Being able to responsibly steward your resources, live within your means and plan for the future is a family value. Proverbs says, "The borrower is a slave to the lender." Those who claim the Bible (or some other text) as a guiding authority have plenty of scriptural admonition to work toward being financially self-sufficient.

Mr. Blackwell is a senior fellow at the Family Research Council, the American Civil Rights Union and the Buckeye Institute in Ohio.

Ken Blackwell

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