Conservatives Are No Longer Even Pretending That They Dislike Debt

Conservatives are for smaller government and less debt, right?

If so, how come the United Kingdom’s Conservative Party plans to spend beyond its means until 2026?

Much like the United States, the United Kingdom just had a shocking election. Earlier predictions of a Conservative—or Tory—blowout were wrong. Voters were excited by the heart-warming, big-spending socialism of Labour’s Jeremy Corbyn. Theresa May, the Conservative leader, was branded as the “austerity” candidate.

In the words of Conservative commentator Adrian Hilton: “For millennials, Corbyn came as Father Christmas; May as the Wicked Witch of the West.”

Because the Conservatives didn’t win a majority, they needed to form a coalition with the Democratic Unionist Party (dup) of Northern Ireland. In return for its help, the dup told Theresa May to end the “dark tunnel of austerity.”

But read the spending plan in her party’s own manifesto, released during the campaign: “We will continue with the fiscal rules announced by the chancellor in the autumn statement last year, which will guide us to a balanced budget by the middle of the next decade” (emphasis added). Despite this, pundits are saying the Conservatives failed in the election because they didn’t promise enough spending.

This is the politics of the English-speaking peoples. The Wicked Witch of Austerity plans on spending more than her government brings in for the next decade. Over in the U.S., Donald Trump, the “King of Debt,” is president.

Additionally, the majority of UK citizens don’t even understand what a “government deficit” is. In 2015, YouGov polled British adults on whether they really knew what it meant. Nearly 70 percent said they had a “totally clear understanding.” Candidates were then given options on what “government deficit” meant:

1. The total amount of money that everyone in the country has collectively borrowed on overdrafts and credit cards
2. The total amount of money that the government has borrowed
3. The amount of extra money that the government borrows each year

The correct answer is option C—the extra borrowing. Only 31 percent chose correctly. The incorrect options A and B were picked by 2 percent and 51 percent of people, respectively. Thus, the British are quite sure that when their government tells them it will “cut the deficit,” it means total debt will decrease. Wrong. You can cut the deficit and still go further into debt.

What the British think they’re hearing is the word “surplus.” What they’re getting is more debt.

The British and American brothers have a debt problem. The next question is, what’s the problem with debt?

First, there are highly intelligent, extremely qualified economists who will tell you excessive debt is not a problem. In fact, nowadays, that’s the consensus—debt and borrowing drives the economy. Economists like Peter Schiff who warn of its dangers are mocked.

At the Trumpet, we see excessive debt as a danger, as explained here and here. For another reason why excessive debt is a curse, we turn to an essay “Nullifying the Will of the People” by American writer Michael Bargo Jr.

To run a government, you need money. The more money, the more things a government can do. The more government debt, the more money spent each year paying (any form of) interest on the debt. That means less money to provide for citizens. As Bargo concludes:

Debt, then, diminishes the will of the people by reducing their legislative choices in the future. The corollary is also true: to the extent that states have balanced budgets today, their future voters will have more choices as how their tax dollars are spent …

Take Japan. Its debt-to-gdp ratio is ridiculously high: around 250 percent. In 2015, Japan spent a quarter of its budget on “national debt service.” That includes redemption of bonds and interest repayments. By themselves, the mere interest repayments take up over 10 percent of all government spending.

https://twitter.com/oecdeconomy/status/588326692097261568

This is what Bargo means by “nullifying the will of the people.”

For a final reason, let’s return to the framework from which the Trumpet always analyzes events—the Bible. Trumpet editor Joel Hilliker approached the subject of debt from an American angle, but it applies to its British brother as well.

He began by reminding readers that 65 percent of Americans believed the Bible “answers all or most of the basic questions of life.” For the British, it is probably lower, but there’s still a good chance the reader is one who agrees with the statement.

Did you know, he asked, “that the Bible specifically foretold America’s national debt? In fact, it prophesied that that debt would be a curse on this country!” He continued:

If you have never read the 28th chapter of Deuteronomy, you should. It is a pivotal chapter of prophecy. You don’t even have to believe that America is a descendant of the Israelite tribe of Manasseh (which we can prove to you) to appreciate the wisdom in this passage. It is simply a list of the blessings that God promises to the nation that obeys Him, and curses that He will send on the nation that disobeys Him.

Read verse 12 to see one of the blessings for obedience: “The Lord shall open unto thee his good treasure, the heaven to give the rain unto thy land in his season, and to bless all the work of thine hand: and thou shalt lend unto many nations, and thou shalt not borrow.”

That makes sense, doesn’t it? It’s a blessing to be able to lend and not have to borrow. As much a blessing as favorable weather and fruitful labor.

It so happens that for much of its history, America has been a net lender. It has been a nation of savers and producers, dominating world trade and manufacturing. It has loaned other nations far more money than it borrowed.

Now, though, look at verse 44. This is within the portion of the chapter describing the curses for disobedience. It says of foreigners (“the stranger”): “He shall lend to thee, and thou shalt not lend to him: he shall be the head, and thou shalt be the tail.”

Debt and borrowing, in excessive amounts—dangerous amounts—is the brutal reality for America, and as Theresa May’s non-austerity shows, for the UK as well. It is so bad, that Conservatives aren’t even pretending anymore to avoid debt. Debt, in a household or in a nation, although many times unavoidable, is not something to aspire to. In the case of America and Britain, it is worse than that. It’s a curse.