Back on February 22nd of this year, John Cogan, a senior fellow at Stanford University’s Hoover Institution, wrote a powerful article in the Wall Street Journal titled: “Why America is Going Broke.”* He makes a compelling argument on why our country’s future looks bleak.
I was recently in Washington D.C. and had the chance to visit several museums. One thought that struck me powerfully is that our founders were seeking to create a government and a nation that would last forever. George Washington called it “the Great Experiment.” Abraham Lincoln called it “the Undecided Experiment” with the hope that we could learn from history so that we might defy history and build a free society that will endure.
The great scholar Os Guinness wrote an insightful essay titled “This Too Shall Pass.” He addresses the problem of slow-motion cultural decline. He believes there is a simple reason why slow-motion decline is such a particular threat to our country. He says “Great civilizations and empires of the past have always been wrecked on two great reefs – the presence of sin in human society and the passing of time. No human success is forever.”
Guinness then makes this powerful observation:
“The year 1787 witnessed not only the ‘miracle’ of the Constitutional Convention in Philadelphia but also the completion of the last volume of Edward Gibbon’s The History of the Decline and Fall of the Roman Empire. A fall beyond belief, Rome’s end – Gibbon wrote from Luasanne – was “the greatest, perhaps, and most awful scene in the history of mankind.” And the first of the four reasons given? “The injuries of time and nature.” In his Lyceum Address in 1837 Lincoln spoke similarly of “the silent artillery of time.”
Cogan in his Wall Street Journal article says, it is not so much a problem of having to run a deficit from time to time, it is that it has become a natural component of our government. However when those deficits grow year after year they will lead to slow-motion financial collapse. Governments who ignore “the injuries of time” are those who expose themselves to its destructiveness.
Author Jim Rickards provides some real insight into this with an article titled “Is this the Moment of Truth?” He quotes from Ernest Hemingway’s novel The Sun Also Rises.
Bill Gorton, a friend of the protagonist, Jake Barnes, has just arrived from New York. Bill is in the café talking with Mike Campbell, an upper-crust Englishman, now fallen on hard times but keeping up appearances.
In the course of telling a story about his tailor, Mike casually mentions his bankruptcy. Here’s the dialogue:
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”
“What brought it on?”
“Friends,” said Mike. “I had a lot of friends. False Friends. Then I had creditors, too. Probably had more creditors than anybody in England.”
Mike believes that he was helpless and that his descent into bankruptcy was beyond his control.
I believe Hemingway’s words “gradually and then suddenly” is a warning on the slow but steady accumulation of debt with no plan to stop it, nor to repay it. Though it can gradually continue over a long period of time, then suddenly there will be a full blown financial disaster the likes of which no one has ever seen.
Rickard notes that the debtor, Mike, didn’t just go bankrupt. He had a lot of “friends” who relied on him for his generosity and support, with no willingness to pay him back or help him in distress.
He also had a general “lack of control” with regard to his financial situation. Most debtors can see problems coming and either cut back spending or take other steps to deal with the debt. Either course will bring the situation to a head sooner than later.
It’s the lack of control that allows the debtor to reach the point of non-sustainable debt, the “gradually” part, and then have a crisis thrust on him all at once, the “suddenly” part. This is how the inevitable becomes a surprise.
Hemingway’s point was that bankruptcy comes much faster than anyone, especially the bankrupted himself, expects.
I believe the one principle that undergirds all of life and is so pertinent to all of this comes from the Apostle Paul who says; “Do not be deceived, God will not be mocked, whatever a man sows, this he shall also reap.” (Galatians 6:7).
He warns us not to be deceived because so many of us are blind, believing we can live any way we would like without facing the consequences. Whether you are an individual, a business, or a government you cannot make up rules for life on the fly. There are always grave consequences when you are out of touch with reality.
Notice that Paul also says “whatever you sow.” It is all inclusive. The law of sowing and reaping is functioning in every arena of life, regardless of intentions, regardless of how well you understand it, or regardless of whether or not you believe it is true.
So much of the destructiveness in our world is because we break the fabric of God’s design and we reap what we sow.
I believe the words that capture the essence of this blog were written over 200 years ago by Scottish historian Alexander Tyler. He said, “A democracy is always temporary in nature; it simply cannot exist as a permanent form of government. A democracy will continue to exist up until the time that voters discover that they can vote themselves generous gifts from the public treasury. From that moment on, the majority always votes for the candidates who promise the most benefits from the public treasury, with the result that every democracy will finally collapse due to loose fiscal policy.”
It does not appear we have learned from history.
*You will be able to read the article “Why America is Going Broke” if you have a subscription to the Wall Street Journal. If you do not have a subscription, please contact us and we will send you a copy.