The Social (In)justice of Our Debt

Posted by on 02/12/13 in America, Behavior, Debt, Ethics, Philanthropy

Sixteen trillion. 16,000,000,000,000. Start with one million. Multiply it one thousand times. Then times one thousand more. Then times sixteen. Stick a “$” in the front and you have the current debt of the United States, not including future obligations. If we were talking stars, we’d be looking at 40-80 Milky Ways, each with 200-400 billion stars. A number so large as to be an abstraction.

Abstractions are dangerous because they do not seem real. Abstractions can be ignored or dismissed. Abstractions can be shaped and spun. Our media and political class have reduced our $16 trillion liability to a series of false choices, positing that we must choose between spurring and stifling growth, between growing and redistributing wealth, between our obligations to the past and to the future.

The greatest false assertion of America’s debt deliberations has been framing debt reduction as a battle waged against the middle class and poor who want/need/deserve more government spending at any cost. The story told from many stumps and blogs is that the debt is necessary to support the neediest among us, that if we cared about our fellow human beings, we would embrace debt. Nothing could be further from the truth.

If social justice is as Franklin D. Roosevelt asserted, “…the path of faith, the path of hope, and the path of love toward our fellow man,” then debt reduction is most certainly a matter of social justice, nothing less.

The US Federal Debt has become the greatest risk to social justice we face because no one is hurt more by our nation’s irresponsible fiscal policy than those of modest or limited means. It is the poorest among us whose lifestyles are most insecure, who have the fewest alternatives in the face of economic adversity, and for whom an economically diseased United States represents a blow to real and potential opportunity.

Consider what’s at stake for those of more modest means when the US encumbers itself as we have, how prolonging our fiscal mismanagement endangers those who least can absorb it.

Public Pension Benefits
Most Americans rely on Social Security or comparable municipal pension plans for most if not all of their retirement income. This benefit is not a luxury but a necessity for a significant portion of our fellow citizens. If we promise unrealistic benefits or otherwise cannot afford to make those payments, then many people will be forced into living situations unimaginable in modern America, circumstances made worse because of increasing longevity, the higher cost of being old, and the fraying of historic social safety nets.

Health Care Accessibility
Over the past several decades, we have shifted more and more health care costs to government sponsored programs, increasing our reliance on a public sector business model. We cannot have effective government-directed healthcare with a functionally insolvent government. The resulting financially driven limits on health care are most acutely felt by those with the least financial resources because they cannot afford to go outside the system to get the services they need or want.

Food Security
Despite our country’s food relief efforts, Feeding America claims that nearly one in six Americans (16.7%) regularly misses meals due to lack of affordability. While nonprofit and private sector donors can provide generous support, the loss of Federal funds for food access would be devastating to those on the margins. Food inflation—whether spurred by increased demand or by the devaluation of the dollar—hits hardest those for whom food is the largest percentage of discretionary income.

Housing Assistance
The Department of Housing and Urban Development reports that over 8.7 million Americans rely on public housing or subsidized housing (Section 8). While many developers have made and likely will continue to make a good living building and managing affordable housing in the US, their low income tenants will be impacted by a loss of funding to support affordable housing development and vouchers.

Jobs
According to the US Treasury the annual cost of servicing America’s debt represents 2-3% of national GDP and that cost will rise, draining our economy much in the way a parasite sucks nutrition from its host’s bloodstream. In this sluggish economy, those with the weakest qualifications will be those who struggle the most to find viable work. The job market is becoming more global and more competitive and a weak economy always hurts those at the bottom of the ladder worst of all, in particular because they have the least cushion with which to start.

War
An economically vulnerable America will lead to more geopolitical conflict. It will be those on the margins who are called upon to fight or for whom the military is the most compelling option not necessarily for patriotic or personal reasons, but because of a lack of viable alternatives. While military service always should be a possibility for people across the economic spectrum, those with the fewest economic options disproportionately bear the burden of protecting the rest.

International Aid
Through USAID, America grants $50 billion per year in direct aid to other countries. Some aid is strictly strategic, but a meaningful amount provides food and disaster relief, combats AIDS, and supports civil society efforts in sub-Saharan Africa, Latin America, and other areas that rely on America’s generosity to mitigate local economic and political weakness. This year alone, the Federal Reserve’s Quantitative Easing claims about $85 billion per month or over $1 trillion in 2013, dwarfing in size and impact the $50 billion per year in aid.

Nearly bankrupt entities—be they companies, cities, states, or nations—put their most economically marginalized people at the greatest risk. Both political parties seem attached to the notion that poor people benefit most from our debt and the services it enables; in fact, the high-leverage culture of the past three decades clearly benefitted the wealthiest among us most by spurring incredible and unsustainable asset inflation and debt-financed merger and acquisition activity.

Unless and until Congress and the White House recognize the inherent injustice in our current debt obligation, we will make no progress in reducing this burden. And as we prolong not just by years but by decades confronting this burden, we chip away daily at the economic security of those closest to the economic margins. Pretending for political reasons that it is the poor and middle class with the most to lose from reducing our debt obligation is a brutal deceit that will hurt most those with the least economic resiliency.

Reframing the challenge of our debt is only the first step; it does not solve our problem. If, however, we can agree that the debt impacts the most vulnerable among us, then perhaps we can work together with greater commitment and speed on how best to address it.

Three hundred and ten million. 310,000,000. Start with one person. Multiply that person one thousand times. Then times one thousand more. Then times 310. That’s the number of citizens we have with a stake in getting this right. A number so large as to make a difference.

 

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