The economic meltdown caused by COVID-19 has left millions of Americans financially dependent on one or more federal programs. Massive unemployment payments, CARES Act funding and other one-time federal relief programs are spreading hundreds of billions of federal dollars around. Even in good times, millions of Americans lived paycheck to paycheck. On losing their jobs, they had little else to sustain them.
During the longest economic boom in our history, which COVID-19 quickly ended, our leaders never came close to balancing the budget; instead, they piled more debt on us than can ever be repaid. The United States’ 2020 fiscal year deficit pre-COVID-19 would have topped $1 trillion, bringing our national debt into the $23 trillion range, larger even than our world-leading gross domestic product.
In the face of the pandemic, Congress and the president have spent another $2.4 trillion to rescue the shellshocked economy. They’re talking about another massive relief package to stimulate business, jobs and buying. If this additional aid package is passed, the U.S. will end up with nearly $30 trillion in national debt — more than 10 times annual federal revenue.
Robert Samuelson, a favorite economic writer, made this dire forecast: “The national debt is out of control. This raises many dangers, including a run against the dollar. Investors, traders, multinational firms, insurance companies and pensions (would) lose confidence in the dollar as a medium of exchange or a store of value. There is no law of nature prohibiting massive selling of dollars, which would trigger instability of interest rates, exchange rates, commodities, stocks and bonds.”
By its fiscal profligacy, the national government’s ability to rescue anyone in future economic and natural disasters has been gravely impaired, which even casts doubt on our government’s ability to discharge the most fundamental governmental functions such as defending against an armed attack or mobilizing resources in a national crisis where money, or the lack of money, will determine what we can or cannot do.
We had better not plan on the federal government bailing any of us out in future emergencies. In the next crisis the feds may not be able to borrow enough money to help everyone who needs it. At some point, they won’t even be able to sustain safety net programs. Of course, the politicians will use every method possible to avoid a default in Social Security and Medicare. But ultimately, even these sacred cows on which tens of millions of seniors rely, some exclusively, may be in jeopardy.
The only real security for any of us is in personal self-reliance: getting an education, working hard, living within one’s means, saving for a rainy day, storing some food and water, paying off and avoiding consumer debt. Tragically, millions of our fellow-citizens have starkly limited earning capacity because of ethnic or racial disparities, addiction, excessive debt, criminal record, lack of marketable skills or poor self-discipline, and thus have not been able to achieve financial independence. But almost everyone can improve their lot in life by learning and applying simple principles of financial independence. In fact, this is the only way it can be done.
Wouldn’t we love to see a system which seeks out those who depend on federal or charitable largesse and those who don’t earn a living wage and incentivizes them to take self-reliance classes teaching how to live on a budget, spend prudently, avoid expensive consumer debt, save a little money, store small amounts of food, water and necessities, and enjoying a sense of independence? We should give them mentors to enhance their employable skills through job training and additional education, help them navigate the job market and teach them the interpersonal skills that breed success and the principles which sustain successful marriages and families. We should give particular attention to those in jail and prison to teach them principles of impulse control, right thinking and self-discipline as well as better job and interpersonal skills.
Our federal government is broke and can no longer act like a wealthy uncle who will bail us out of our next financial scrape. The best preparation for the next national emergency would be to help the chronically poor, who are able, to become financially independent.
Greg Bell is the former lieutenant governor of Utah and the current president and CEO of the Utah Hospital Association.