It’s my parents’ fault

By Mac McPhail - Guest columnist
Mac McPhail -

Evidently, I have been wrong. It’s hard to admit. But I am not the blame, it’s my parents fault. (It’s always your parents’ fault.) It’s because they warned me about the dangers of being in debt. Also, they took me to church. So it’s their fault I haven’t made lots of money in the stock market.

My father and mother were children during the Great Depression. They saw the hard times of the 1930’s as a child. They saw farm land lost when payments couldn’t be made. Although they were young, they experienced those difficult times, and those memories stuck with them for a lifetime.

For them, debt was to be avoided as much as possible. If you went into debt, it was for something that was going to appreciate in value, not decline after purchase. And that debt was to be paid off as soon as possible, even if it meant sacrificing somewhere else. They did not want to be in a position to be ruined financially by debt if the economy went bad. They had seen that time, and didn’t want to be ill prepared if it happened again. So they preached to their children that too much debt will lead to disaster, and we listened.

And they also took us to church. At church, we learned to be wary of debt because “the borrower is servant to the lender.” (Proverbs 22:7) At church, we learned to “count the cost” (Luke 14:28), to consider the consequences before making important decisions, like going into debt.

So, as an adult, I have been wary of debt, and I have strived, like my parents, to avoid it as much as possible. As the years have gone by, I have also grown concerned about the financial debt of our country, and if too much U.S. debt will lead to the disaster my parents warned of. But I am starting to realize that maybe too much national debt is just what we need.

The national debt growth spurt started during the Ronald Reagan administration, when it doubled from $2 to $4 trillion. It leveled out some, only increasing $1 trillion to $5 trillion, during the Bill Clinton years. (Oh, the good old days.) But since 2000, the U.S. national debt has exploded. It more than doubled from $5 trillion to $11 trillion during the eight years George Bush was President.

At the depth of the Great Recession in 2009, the U.S. stock market was in the pits. The Dow Jones industrial average was below 7,000 during March that year. Friends and I talked about that it was a good time to go all in on stocks. But I was reluctant. The economy was shaky, and with a $9 trillion U.S. debt, I was worried about the future.

The stock market started coming back strong. And so did the U.S. debt. What the U.S. owed almost doubled again during the Barak Obama administration, going from $11 trillion to the $20 trillion national debt. And there are no prospects of the borrowing by the U.S. government slowing down. Current budget estimates predict the U.S. debt to increase to $29 trillion over the next few years. And the new tax law recently passed is expected to add another $1.5 trillion to the national debt.

In the old days, this would have really concerned me. What if someone, some institution, some country calls in their huge loans to the U.S. and demands payment? What if we are unable to pay? What would that do to our economy, the value of our dollars? But now, I’m not concerned so much. Why? Because of a quote I recently read in “Win Bigly,” a book by author, Scott Adams. He writes, “There is an old bank saying: If you borrow a million dollars from a bank, the bank essentially owns you. But if you borrow $10 billion, you own the bank.”

That’s it! The U.S. government owes so much that it would cost our creditors too much to make us pay. In other words, to borrow an economic phrase from 2009, it looks like we are “too big to fail.” The stock market folks evidently aren’t worried about the U.S. debt. The Dow Jones market index will probably be over 26,000 by the time you read this. The economic experts probably are singing, “Happy days are here again!” (Ironically, a song written right before the Great Market Crash in 1929)

So, I have mostly missed out on the economic gains from the stock market surge. I’m blaming my parents. They warned me about debt, and they took me to church. But I also learned at church that God judged harshly nations that turned their back on Him. Maybe the U.S. debt shouldn’t be my main concern after all.

Mac McPhail McPhail

By Mac McPhail

Guest columnist

Mac McPhail, raised in Sampson County, lives in Clinton and can be reached at [email protected]

Mac McPhail, raised in Sampson County, lives in Clinton and can be reached at [email protected]