The Deficit That Matters Most

The Deficit That Matters Most

By Lawrence W. Reed

In 1890, American voters fumed against Washington because it spent a record one billion dollars in just two years’ time. They punished the “Billion Dollar Congress” in the elections that year by tossing out nearly a hundred members.

Adjusting for inflation, one billion dollars in 1890 equals slightly less than 30 billion in today’s currency. It took Congress two years to spend then what today’s Congress blows in about three weeks.

Figured yet another way, just one federal department in 2021—the Department of Health and Human Services—will spend in a week and a half what the entire federal government spent over two years in 1890.

At about 330 million people, the country’s population is a little more than five times the 63 million it was in 1890. The growth in federal spending over the period far and way excepts the growth in population, but I’ll let you do the math.

If all its spending were covered by tax revenues—in other words, if the budget were balanced—Americans could rightfully complain about high taxes. At least we could say we weren’t going deeper into debt. But this year alone, the U.S. government will recklessly spend about $2.3 trillion MORE than its total tax intake. That’s the deficit, the “red ink” that Americans once despised enough that the big spenders trembled at their wrath.

Americans of 1890 were still mindful of Thomas Jefferson’s warning barely a century before: “We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude.” The big spenders of that year were penny pinchers compared to the porkers in Washington these last few years.

Today’s red ink should terrify us, but the deficit that matters most is not reckoned in dollars at all. It relates to the heart and mind. It reflects the values with which we shape our actions and our purposes. I speak of a deficit of character, which arguably is the root of all of our major economic and social troubles today.

Your character is not defined by what you say you believe. It’s defined by the actual choices you make, especially in tough situations. History frequently records that when people allow their personal character to erode, they become putty in the hands of tyrants and demagogues. What message do the big spenders get when the voters send them back to Congress to spend even more?

Among the traits that define strong character are honesty, humility, responsibility, self-discipline, courage, self-reliance, respect for other people’s property, and long-term thinking. A free society is not possible without these traits in widespread practice.

When a person spurns his conscience and fails to do what he knows is right, he subtracts from his character. When he evades his responsibilities, foists his problems and burdens on others, fails to exert self-discipline, allows or encourages wrongdoing on any scale, attempts to reform the world without reforming himself first, obligates the unborn to pay his current bills, or expects politicians to solve problems that are properly his own business alone, he subtracts from his character, and he drags the rest of us down with him.

Audiences ask me all the time, “Mr. Reed, what do you think the #1 problem is in the country today?” They expect me to say it’s government spending, or deficits, or crime, or opioids, or taxes, or racism, or the national debt. It is none of those.

The #1 problem today is the same problem in every country. It was the #1 problem everywhere a century ago, five centuries ago, and 20 centuries ago. It is the deficit in character. Why has it always and everywhere been the #1 problem? Because every human-created trouble in society springs from it. Government spending, deficits, crime, opioids, taxes, racism, the national debt and a host of other troubles—these are all problems because they spring first from a deficit of character.

Once, most Americans expected government to keep the peace and otherwise leave them alone. We built a vibrant, self-reliant, entrepreneurial culture with strong families and solid values.

Somewhere along the way, we lost our moral compass. Like the Roman Republic that rose on integrity and collapsed in corruption, we thought “bread and circuses” from government would buy comfort and security. We act like we really don’t want to be free and responsible citizens, so we get less responsibility from our leaders and less freedom for us. Instead of practicing self-discipline, we increasingly indulge ourselves in harmful habits and pathologies. Massive deficit spending by the politicians we elect and re-elect is one sign of moral decay, of the growing deficit of character.

Two thousand years ago in his great history of Rome, the historian Livy reflected on the erosion of moral character that had already turned the Republic into a dictatorship. He urged his fellow Romans to look inward for the source of their decline:

Then as the standard of morality gradually lowers, let him follow the decay of the national character, observing how at first it slowly sinks, then slips downward more and more rapidly, and finally begins to plunge into headlong ruin, until he reaches these days, in which we can bear neither our diseases nor their remedies.

National suicide cannot be a pretty thing. My hope is that Americans will come to their senses. At the moment, though, it appears that far too many are happy to go along with the ride.