On radio, in books and personal appearances, Dave Ramsey has become America’s best-known preacher of the joys of personal financial independence. He always invites the faithful to testify. Properly cued, individuals and couples who were saddled by debt before seeing the light are invited to shout “I’M DEBT FREE” as loudly as they can.
It is a liberating moment.
Can’t help but feel really good for these folks and what they have accomplished.
But the statement is not accurate.
Because even if their cars and their homes and their four-wheelers are paid off and even if they have torn up their credit cards and are sticking to a household budget, they’re still on the hook for a lot of debt.
It’s public debt, not private debt.
But they owe it just the same.
It is difficult to write about public debt without descending into an angry rant.
There’s just so much of it.
And it’s so inexcusable.
As of last week, each man, woman and child owes $55,670.
That’s the federal tally.
For Mississippians, tack on another $5,173 per person (which is far less than some states, far more than others).
Growing or shrinking?
Let’s say our happy, debt-free couple was born in 1980 and has reached the ripe old age of 34. Their share of the national debt the day they were born was a mere $4,000 each. For every dollar they owed then, they owe 13 now.
Last year, mere interest on the national debt was $223 billion. When our couple hits 44 years old, the interest will total $823 billion.
That’s a deep, deep hole. And here’s what few pause to ponder: It has been dug at about the same rate by “conservatives” as it has by “liberals.”
So who’s the culprit?
A good suspect would be the person who wrote the first entitlement program — or any program where the payout was not indexed to revenue. Perhaps it was Social Security, although the notion the public pension program would ever cost more than it brought in was initially far-fetched — not part of the plan.
Perhaps this is the core issue with all well-meaning, financially sound programs that are begun in good faith — but never revisited. Financial costs are allowed to spiral because the political cost of change would be too high.
Even the most generous charities stop giving away aid when stockpiles are depleted. Not government.
In dozens of dozens of programs — most for the rich and a few for the poor — qualifications are set by laws and regulations. Anyone who qualifies gets a check or whatever benefit is associated with the entitlement.
There are specific revenue streams associated with some entitlements — Medicare and Social Security come to mind — but they don’t come close to covering program expenses. Most have no dedicated revenue. They cost whatever they cost. This means government knows how much money it has in its pocket, but orders from a menu without prices anyway.
And while borrowing has actually slowed a tiny bit, the Treasury actually is still moving deeper into the red ink column. It doesn’t have 31 cents of every dollar it distributes.
Some aspects are insidious — corrupt on their face. It’s an open secret that medical payments and IRS refunds are not screened. Congress, under pressure from lobbyists, has ordered that instant payment be made for every facially acceptable claim. Weeks or months later — once the fraudsters have left and set up shop elsewhere — an investigator may come to check up on a physical therapist paid for 600 procedures on a client the year after the client died.
This approach — pay first, investigate later — is the same as a bank writing a check for a mortgage and giving it to a person before taking an application or even determining that the house exists.
We don’t fret about debt or mismanagement. We fret about whether Democrats are elected or that Republicans are elected. We’re told that the greedy rich are to blame or the shiftless poor are to blame.
And the notion that the outgo of any enterprise — whether it’s a city, state or a country — should bear some relationship to the income is brushed aside again and again and again.
Perhaps it is too painful to think about.
On the other hand, perhaps we should require every candidate for any public office to pass Dave Ramsey’s course. The tuition money would have to be borrowed, but it might be worth it.
Charlie Mitchell is a Mississippi journalist. Write to him at Box 1, University, MS 38677, or e-mail firstname.lastname@example.org.