#153 How to Destroy an Economy
Four policies are attempting to destroy the US economy.  Let's pray they don't.
 
In the history of mankind, countries, and economies have come and gone.  We know what destroys them.  I’m sorry to observe that the United States economy, the greatest economy in world’s history, is taking steps toward destruction.  
I’m an academic, and I’m pleased and proud to give citations where necessary.  Today’s idea comes from an article in the Epoch Times by Victor Davis Hanson titled, If you really wanted to destroy the US.  He knows more about political history than I do, and his article goes in that direction.  My observations, predictably, are about the economy.  
 
Destroy the Dollar
I unpacked some of this idea in podcasts #101 titled Inflating Inflation, and in podcast #62 The End of Fed Independence. 
As covid was ending and demand was rising, the government used fiscal policy to spend trillions.  The Fed kept interest rates low, as they increased the money supply.  That’s a classic formula for inflation.  If you increase the supply of dollars and keep constant the products they are buying, the currency will depreciate.  Inflation harms the poor, who we Christians care about.  The last two quarterly reports had inflation at 8.5%, then 7.1%.  You realize, that’s four times the goal of 2%.  Think about it: If a sophomore in my econ class was hoping for a B, by earning 80%, and she actually earned 20%, would a parent be proud of that achievement?  But that’s what the administration is doing: They are bragging that, at 7.1%, inflation is only four times what they want it to be.  See if your kids are happy with four times fewer toys at Christmas.  
Why is the dollar still strong on the foreign exchange?  Because, even though the US is doing terrible, the other developed countries are doing terriblier.  We are the best house in a bad neighborhood.  
 
Increase the National Debt
When my sophomores at Dallas Baptist University were born, the national debt was about $5 trillion.  It’s now $31 trillion.  But, millions, billions, trillions, it all gets confusing, so let me give you some context.  When my sophomores were born, the debt to GDP ratio was 56%.  It’s now 121%.  It has more than doubled in twenty years.  And, the last six years have been really frightening.  National debt has ballooned from $20 trillion when my sophomores were in high school, to now $31 trillion, and they’re only half way through college. 
SOME debt is not so bad, it depends on what you do with it.  Using debt as leverage is good.  That’s where Dave Ramsey and I depart.  He says you should have NO debt.  It seems to me that debt as leverage makes you richer.  Of course, there’s risk.  There is always risk.  But the current debt that the United States is accumulating is not being used to build capital infrastructure that creates more value, it is being used to maintain social programs.  Which, by the way, the church is supposed to do, but I’ve spoken quite a lot on that in the last few weeks.  
This year, the government will take in almost $5 trillion and spe...