Blog author: jballor
Friday, July 15, 2011
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Grand Rapids has been the focus of national attention over the last week or so, most recently for the services surrounding the passing of former First Lady Betty Ford. In the midst of loss and mourning, there’s some cause for levity. See, for instance, this local news story that is getting some coverage around the country, “Angry bird attacks during Ford services.”

I myself have been a victim of this red-winged menace! Some of you may have heard that one of the reasons that Acton University (our premier week-long program held in Grand Rapids) changed venues this year was to accommodate an increase in participants. But now the real reason can be made public: we had to change venues to avoid these angry birds!

Angry Bird!
Well, maybe not. But I still think this red-winged menace must be eliminated! It is a matter of public safety: “The Red-Winged Blackbird can be very aggressive while defending its territory from other animals and birds.” That’s an understatement!

Red Menace

Blog author: eamyx
Thursday, July 14, 2011
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Back in February 2008, then candidate for president Barack Obama addressed a crowd at a General Motors Assembly Plant in Janesville, Wis. He said,

…I am my brother’s keeper; I am my sister’s keeper– that makes this country work. It’s what allows us to pursue out individual dreams, yet still come together as a single American family. E pluribus Unum. Out of many, one.

It is ironic that Obama preached a “we’re-in-this-together” economic philosophy yet three years later, Main Street is carrying Washington’s debt burden.

Debt negotiations are currently at a deadlock in Washington over taxes. President Obama doesn’t want to follow through with $4 trillion in spending cuts without a $1 trillion tax increase, while Senate Democrats are asking for a whopping $2 trillion in new taxes. Democrats also do not want to sacrifice entitlement programs. Top leaders worry they will not be able to reach a deal in time to avoid a government default. With the predicted default deadline of August 2 creeping around the corner and unemployment on the rise at 9.2 percent, citizens feel a sense of urgency about the debt crisis.

When Obama said “I am my brother’s keeper,” what did he really mean? If the government is to act as our brother’s keeper, this means it should be accepting responsibility for the welfare of all citizens. Raising taxes to cover up Washington’s nasty spending habits is certainly not accepting any responsibility.

If the government was really acting in the best interest of its citizens, it would stop raising taxes. According to the Tax Foundation, Americans will need to work from January 1 to April 12 before they have earned enough to pay off their taxes. Tax increases may seem like a quick way to reduce the deficit as opposed to spending cuts alone, but the bottom line is that Washington has a spending problem, not a revenue problem. A Goldman Sachs report found that tax increases usually fail to correct fiscal imbalances and are damaging to economic growth while spending cuts correct fiscal imbalances and boost growth. Milton Friedman explains in his essay titled Fallacy: Government Spending and Deficits Stimulate the Economy why government spending does not mean “stimulus”:

Getting the extra taxes, however, requires raising the rate of taxation. As a result, the taxpayer gets to keep less of each dollar earned or received as a return on investment, which reduces his or her incentive to work and to save. The resulting reduction in effort or in savings is a hidden cost of the extra spending. Far from being a stimulus to the economy, extra spending financed through higher taxes is a drag on the economy.

The $2 trillion tax increase Senate Democrats are pushing has the potential to suffocate economic growth and job creation, which would not be good news for 14 million unemployed Americans. Today, the Great Recession now has more idle workers than the Great Depression. An article in The Fiscal Times claims the employment level is nowhere near where it should be for a typical recovery:

In a typical recovery, we would have had several hundred thousand more hires per month than we are seeing now—this despite unprecedented fiscal and monetary stimulus (including the rescue of the automobile industry, whose collapse would likely have lost a million jobs).

If spending binges don’t work for a family, why would they work for a government? When a family spends more than they are making, the only sensible solution would be to cut spending. Bureaucrats should take House Minority Leader Eric Cantor’s advice and be willing to share the sacrifice:

Everyone understands that Washington has been on a spending binge of late and we’ve got to start spending money the way taxpayers are right now and that’s learning how to do more with less.

The debt crisis is not just an economic hazard but a prodigious moral issue of poor stewardship as explained in an Acton commentary by Jordan Ballor and Ray Nothstine titled The Fiscal Responsibility of Mall Rats and Bureaucrats:

Responsible stewardship of one’s material resources is a consistent and recurring biblical theme. At the conclusion of a parable on stewardship, Jesus said, “Whoever can be trusted with very little can also be trusted with much, and whoever is dishonest with very little will also be dishonest with much” (Luke 16:10 NIV). We shouldn’t be duped into granting the use of greater and greater portions of our paychecks to a federal government that has been unfaithful with what it has already claimed.

Our economy will continue to hobble along until Washington is willing to truly act as a brother’s keeper in showing that it too can share the sacrifices necessary for getting spending under control. Until then, we will pay the price for Washington’s fiscal irresponsibility and millions of Americans will continue to struggle.

Blog author: ken.larson
Wednesday, July 13, 2011
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In the opening scenes of the classic movie version of Thorton Wilder’s play “Our Town” the narrator tells us that the newspaper boy we are watching toss papers onto the porches nearby will go on to college — an ivy league college I recall — but is sent to Europe during WWI and dies. “All that education for nothing,” he laments.

Naomi Riley has written another book about academia. The large type on the book jacket reads “The Faculty Lounges”  but under that banner is the book’s real warning: “… and other reasons why you won’t get the college education you paid for.”

That second part is addressed to the payer, and in most cases, the payer is mom and dad. So if you’re a mom or dad you’d best take a look at this offering from Ms. Riley while the kids are still in grade school and start your homework lessons on where you’re likely to get the best bang for your buck. Because although Riley offers good suggestions and a smattering of potential improvements to the business plans of America’s college and university campuses, they aren’t likely to be implemented on any large scale by the time little Jimmie or his sister is ready for college. The wheels of the academy turn slowly.

In a recent column reflective of his tv shows, John Stossel remarks, “What puzzles me is why the market doesn’t punish colleges that don’t serve their customers well. The opposite has happened: Tuitions have risen four times faster than inflation.”

That reality and more is provided in Faculty Lounges but not by tv personalities. No, the sources of Ms. Riley’s information in many cases are members of the education establishment themselves. And they’re not very forgiving in the criticism.

But Stossel’s comments are poignant. As consumers, parents and the children they finance through four or more years of college tuition, room and board are getting screwed to put it bluntly, or at least defrauded, and nobody seems to care about the protection these consumers aren’t getting. Certainly not the education industry.

You can only get the full picture by reading the book but I can tell you that faculty tenure and the unreal situation it nurtures is a big piece of why college costs so much and continues to get more expensive. Imagine having a workforce that agreed to work Monday, Wednesday and Friday from 10 am to 2:00, notwithstanding the time it takes for lunch? But despite that work schedule continues to be paid like a full time 40 hours per week employee. Now imagine having an entire workforce of such folks but a physical plant with classroom space based on a capacity that is suited to having students in the rooms from 8 am to 5 pm. In business we call it underutilized plant capacity. It’s the reason you have a night shift or swing shift when business is booming.

In the surreal world of academia, such concepts would never be discussed. Instead, buildings continue to be built, new departments funded and staffed, and tuition raised, raised, and raised again. Where will it end? A tilting point is often reached when mom and dad, facing financial calamity or at the least really tough times, tell little Jimmie to find a job and put college on hold. That’s what happened to my mom and dad in 1932. They met and were married a few years later.

One thing stands out in the many anecdotes in this book and that is how the undergrads financially support the graduate programs. If you know someone who has been accepted or is participating in a PhD program you might have also been told that the tuition, room and board and a stipend were part of the deal. Of course these opportunities are only available to really bright kids but still, haven’t you wondered who’s paying the bills. Well, it’s you and your undergrad. And who’s taking care of the tenured professor’s classes? one of his grad students. And not getting paid for it either. That’s a good reason to think twice about little Jimmie attending the prestigious university with the myriad of researching scholars.

For many, tenure or lifetime job security is what makes the academic life palatable. Yet many use the “academic freedom” argument to make their case. Liberals argue that they’d never survive proposing their enlightenment theories without the protection of tenure. Conservatives argue that they’d never be able to come out of the political closet without tenure. Both making this case in a country that links its founding to freedom of speech, assembly, faith. It makes you wonder if anybody could pass a civics test — teacher and student alike.

Of course all of this talk of college, money and careers has been the subject of the month of June since school calendars were first printed. Books rush to the shelves and abound on how to get into college; is college for everyone; the missing “core” curriculum; and is it all worth the money. But until we consumers really start to push back, it’s likely that for many schools, nothing will change despite the revelations and suggestions like those in Riley’s book. And it’s parents who have to lead here. And either way prepare their children for life with a eye on the unexpected and the common sense to avoid danger.

In April a Yale senior astronomy and physics major was found dead in a college lab. She was working alone during the night with a machine tool — a lathe — and somehow her hair which was long and dangling had been wrapped around the spinning chuck and she had either choked or her neck was broken. Some, reacting to the tragedy, blamed Yale for not sufficiently supervising her.

“All that education for nothing.”

Kishore Jayabalan, Director of Istituto Acton in Rome, was interviewed by Vatican Radio to discuss the Italian budget. Italy has a large budget crisis, and if it isn’t resolved, it may face serious financial problems similar to those experienced by Greece.

Lawmakers in Italy have begun working on austerity measures, which was the topic of Jayabalan’s interview:

“Austerity is fairly important for the Italian economy,” says Kishore Jayabalan, the director of the Rome office of the Acton Institute. But he says even with austerity, Italy will need economic growth to pay its debts.

[…]

“They are creating all kinds of impediments for economic growth. If you want to get the Italian economy reformed, the political class not only is going to have to do things like get rid of regulations, but really cut down the bureaucracy, because that is what is really bringing down the Italian economy,” Jayabalan said.

Click here to read the full article and listen to the interview.

Both the religious right and left have weighed in during the heated federal budget battle as Congressman Paul Ryan’s proposed budget has seen its fair share of support and criticism from many religious leaders.

In a recent article appearing in Our Sunday Visitor Congressman Ryan explains how he used Catholic social doctrine to help draft his proposed budget opening up with his views on it should be utilized by politicians:

Catholic social doctrine is indispensable for officeholders, but there’s a right way and a wrong way to understand it. The wrong way is to treat it like a party platform or a utopian plan to solve all of society’s problems. Social teaching is not the monopoly of one political party, nor is it a moral command that confuses the preferential option for the poor with a preferential option for bigger government.

[…]

Policymakers apply timeless principles to policies that are necessarily limited by changing circumstances. The judgments of equally well-intentioned citizens may differ. Usually, there isn’t just one morally valid policy. Instead, there are better and worse ones calling for respectful dialogue and thoughtful judgment. The moral principles are dogmatic; the political responses are prudential.

Throughout the article Congressman Ryan defends his proposed budget by articulating how the poor and vulnerable will benefit, how it preserves human dignity, that it creates budgetary discipline (which according to the Congressman is a moral imperative), and abides by the principle of subsidiarity.

Furthermore, Congressman Ryan argues the U.S. government cannot keep the principles promoted by Catholic social doctrine if the country defaults stating: “Preferences for the poor, solidarity, subsidiarity, the common good and human dignity are disregarded when governments default and bankrupt economies stop producing. Economic well-being is a foundation stone of an enduring ‘civilization of love.’”

Here at the Acton Institute we also understand the importance of passing a federal budget that is morally sound. We wrote our Principles for Budget Reform where readers can find articles, videos, and blog posts in support of four vital principles.

To read the full article click here.

Click here to read the Acton Institute’s Principles for Budget Reform.

In this week’s Acton Commentary, “Commodifying Compassion,” I look at the instinct to judge a society’s commitment to charity by the level of material expenditure, particularly by the government. One of the things I think is true in this conversation is that our material commitments do show something about our spiritual concerns. So I can agree with Brian McLaren, then, that “America’s Greatest Deficit is Spiritual, Not Merely Financial.”

But where I can’t go with him is to the conclusion that changing levels of material assistance by definition has some kind of spiritual consequence or cause. Thus, even while McLaren writes that we need to “face our basic spirituality deficit,” he still judges the “compassion deficit” in terms of cutting material “services to the poor, the elderly, the sick, minorities, and to children.”

Over at The French Revolution, David French asked pointedly in this regard, “Does more spending equal more compassion?” He focuses particularly on the “how” question of social spending:

All too often it seems that the religious left virtually takes for granted that the hundreds of billions of dollars spent fighting poverty and funding education (to take two examples) represent money well spent and that cutting that funding is “balancing the budget on the backs of the poor” or “sacrificing our children’s future.”

French makes some very good points, particularly about the cultural (rather than merely material) aspects of poverty.

But in my piece this week I also focus on the “who” and the “why” questions of material assistance. I contend, “An EBT card issued by a government official shouldn’t be judged to be the same as a ‘cup of cold water’ given by a Christian in the name of Jesus Christ.” I also conclude by examining what the case of the widow’s offering (Luke 21:1-4 NIV) teaches us.

I usually feel sorry when I see the latest news about data compromise, hacks, or identity theft.  Though I feel for the victims, I also think about the individuals carrying out the act.  Society rightly looks down on such behavior, especially if the victims are everyday people.

What about when a high profile organization or government is hacked?  What if an organization of questionable reputation is targeted?  The online group Anonymous often aims at high profile targets with their hacks, DDoS attacks and other planned invasions.  By making the decision to compromise organizations, even questionable ones, Anonymous assumes responsibility for its actions.  Individuals that are a part of this online group hide their real identity to commit acts that are illegal.

Growing up, I believe most young people interested in computing are aware that there is a “wrong path.”  As in, property damage and theft are wrong.  This path includes learning how to break into different types of computer systems to seek information or modify a system’s behavior, typically for reasons advantageous to the hacker.  Anyone that is involved with technology knows this path exists.  Luckily, most of us are taught to respect others’ property, even if that property is digital.  What’s more, this activity undermines the rule of law and the ability of people to freely create wealth (see Acton’s Core Principles).

Computer programming is an important craft.  It’s simple to learn a little programming, but as you advance in skill the tasks become easier to perform.  Whether it is building a website, desktop computer application, or a small game, many people obtain enjoyment out of building unique and useful tools and products.  However, the same skills can be used to make an application that tricks people, steals their information or prevents their computer from functioning properly.  Individuals who make these keyloggers, trojans and worms typically do so out of greed or hate.

People break into computer networks or systems with malicious intent are called black hat hackers.  As you might expect, there are also white hat hackers.  White hats break into computer networks and systems too, but instead of taking advantage of the system’s weakness, they notify the owner of the system about the vulnerability so they may fix the problem.  Computer security is a classic case of good versus evil.  You might even call it one of those moral issues that are clearly black and white.

What stops black hats from becoming white hats?  Unfortunately, if there were no black hats there would also be no need for white hats.  Most white hats start out as black hats since learning the craft requires knowledge of breaking into systems.  White hats make a legitimate living through consulting and by working in organizations to ensure systems are secure.  They (hopefully) have a strong sense of right, especially if they start out as a white hat.

Even if you don’t know someone who works in computer security, it’s likely that your favorite IT person deals with security on a daily basis.  The IT professional that the white hat informs must secure their system against compromise, which requires knowledge of how hackers break in.  System owners are stewards of activity and information they manage.  They have the same access that hackers have to information stored in computers they work with.  Their job is to protect that information as well as ensuring its proper use within the system.

If the system administrator fails at their job, unsuspecting individuals using the system lose something.  It might be privacy, financial information, their own computer’s security or even their identity.  Black hats and hackers like the ones from Anonymous abuse gaps in security for their own amusement, personal reasons and notoriety.  They lack basic concepts of morality and are especially void of respect for any IT professional or individuals on the receiving end of their attack.

Water is becoming scarcer and even more of a necessity than it was before. And while stories of water scarcity typically occur in underdeveloped, arid countries, the United States and other developed countries must realize they are no longer exceptions and must take into consideration the importance of water and the allocation of its use.

A recent article in the Wall Street Journal explores the severe lack of water in Palm Beach, Florida. Residents are restricted to once-a-week watering schedules for lawns and plants, however, not all residents are abiding by restrictions whereas many owners of large estates are continuing an excessive use of water. The disparity in water usage has created a disgruntled community in West Palm Beach.

While residents in the U.S. are disagreeing over water usage for landscape purposes, many throughout the world are dying of thirst, thus, putting forth the question, do communities need to reevaluate their water use? Grass, and green luscious landscapes that are found in more moderate climates are not natural to southern Florida, so is it moral for residents to obtain a landscape, requiring a large use of water, that isn’t even native to an area?

Water scarcity has become a cause for concern in the United Kingdom, and Egypt and Ethiopia have been battling over the share of the Nile’s water reserves. Many countries and local communities are now forced to take into consideration their long term use of water.

In past blog posts (here, here, and here) I’ve taken a look at the water crisis and with Italians recently deciding to repeal a law that required water to be treated as a commodity, an explanation of my previous argument in support for treating water as a commodity is needed. My last post was missing an important moral case for the privatization of water that needs to be addressed.

In his essay, “Thirst: A Short History of Drinking Water” James Salzman analyzes how different civilizations throughout history provided drinking water. Jewish law, according to Salzman, treated water as a common property resource, not an open access resource. Priority was given according to use, giving drinking water the highest priority. While water, which came from a well made possible by human labor, was for community use only, nobody was turned away who was in need of drinking water.

Rome is a great example of how water resources were allocated when a water supply and sanitation system existed. There was a public water source, known as the lacus, where Romans could collect water for free. When using the lacus, Romans had to use their own manual labor to transport the water from the lacus to their homes. However, there was also a private water supply where Romans could pay to have water brought into their homes through a pipe system.

The “right to thirst,” as explained by Salzman, is recognized by both the Romans and the Jewish law. Salzman explains every human has a right to water, and both civilizations understand that right by providing free drinking water to those in need. Such compassion shows one’s love for his or her neighbor.

However, as we see through the example of the Romans, the convenience of having a clean and sanitary water supply delivered into a home comes with a price. While we have a right to water we have to pay for the resources and the costs that come with such modern conveniences. Furthermore, as I’ve explained in my past blog post, “Water is not a human right” if we have free water for all, we will bear witness to tragedy of the commons with our water resources.

At a recent symposium on economics and finance, Cardinal Tarcisio Bertone, the Vatican’s Secretary of the State, explained the importance of the private sector in water supply. Cardinal Bertone underscores the contribution that the private sector can make to providing access to water. However, he also recognizes the importance that businesses that do provide water are being called to provide an important service to people and morals need to have a higher priority than profit:

The second challenge has to do with the administration of “common goods” such as water, energy sources, communities, the social and civic capital of peoples and cities.  Business today has to become more and more involved with these common goods, since in a complex global economy it can no longer be left to the state or the public sector to administer them: the talent of the business sector is also needed if they are to be properly managed.  Where common goods are concerned, we urgently need business leaders for whom profit is not the exclusive goal.  More and more, we need business leaders with a social conscience, leaders whose innovation, creativity and efficiency are driven by more than profit, leaders who see their work as part of a new social contract with the public and with civil society.

There is opposition to how water should be supplied. The Catholic left has a different view, supporting government’s role in providing water instead of a private entity:

On June 9, a group of more than 100 missionary priests and nuns fasted and prayed in St. Peter’s Square to underline their support for the referendum and their opposition to the privatization of water. Beneath Pope Benedict XVI’s windows, they unfurled a giant banner reading: “Lord, help us save the water!”

[…]

Some 25 Italian dioceses signed an appeal asking for a “yes” vote to preserve water as a universally shared resource. Franciscans in Assisi asked prayers and action in defense of “sister water.”

Bishop Mariano Crociata, secretary-general of the Italian bishops’ conference, said recently that access to clean water supplies was a “fundamental human right, connected to the very right to life.” He warned that privatization efforts have seen multinational companies “turn water into business” to the detriment of the wider population.

And while the U.S. has been criticized for consuming 233 billion gallons of water, it must also be kept in context. The U.S. is still one of the largest and most productive economies, producing goods that are exported to countless countries. Such productivity requires a greater consumption of water than less productive countries, however, every country that does import U.S. goods benefits.

As water is becoming scarcer we will need to reevaluate how we use and treat this precious resource. Yes, we have a obligation to take care of those in need, we must  recognize, however the difference between the “right to thirst,” to have water in order to sustain life, and the luxury of commoditized water provided through extensive resources to be delivered into homes for domestic use. The Catholic Church teaches that the universal destination of material goods (water is one such good) and the principle of common use of the earth’s resources (such as mater) is primarily (though not exclusively) realized the institution of private property—an institution that comes with rights and responsibilities. Applying this reasoning to the dilemmas facing us with regard to water would certainly lead to clearer thinking about this complex question.

Acton’s Rev. Robert A. Sirico published an article in Religion and Liberty in the fall of 2010 on Haiti and how we could help it recover.  It has been several months since then, and eighteen months since a 7.0 magnitude earthquake struck Haiti near Port-au-Prince, killing around 230,000 people.  Eighteen months is a long time and many, including myself, have pushed Haiti into the background of their minds.  However, Haiti is still desperately struggling to recover from this terrible disaster.

Excerpts from a letter written to the International Organization of Migration by a Haitian citizen show just how dire the situation is: “Since January 12th, things have only gotten worse and worse. We do not have work and we do not have money. There is no supervision. We are shown hope, but nothing has come to us except the hurricane season.”

Another letter written to the IOM by a Haitian citizen states: “What will be done for those of us living in tents? We are eating dust. We want to go home. How can you help? There are talks of a rebuilding process since IOM carried out a registration in the camp but nothing has happened. Must we wait for ever? We want to find work, because it is very painful to wait and be dependent on others for help. When we work, we suffer less. We believe that if IOM could give us work, things would be better for us and our families.”

The Haitian people are still struggling mightily to merely survive.  How did this happen?

It has not been from a lack of generosity.  According to the British charity Oxfam, “over $1 billion was quickly raised for the emergency response… [it was] ‘unprecedented generosity’ shown by the world for Haiti.”

In fact, the aid has helped in many ways:  “U.N. figures show around 4 million people received food assistance, emergency shelter materials were delivered to 1.5 million, safe water was distributed to more than a million, while a million more benefited from cash for work programs.  The U.N. World Food Program continues to help close to two million Haitians with school meals, nutrition and cash-and-food-for work programs.”

However, as the recovery has dragged on, Oxfam reports that “few damaged houses have been repaired and only 15 percent of the basic and temporary new housing required has yet been built.”  Also, much of the rubble from the earthquake has yet to be cleared, which has significantly slowed rebuilding and recovery efforts.

In terms of human health, the president of Doctors Without Borders International “blasted what he called the ‘failure of the humanitarian relief system’ to stem cholera epidemic deaths in Haiti.”

In addition, Oxfam reports “The World Bank says almost half of the $5.3 billion — about $2.6 billion — has been approved in donors’ budgets, while a separate Bank document said [only] $1.2 billion had been actually disbursed to date for program support.”  Only about 23 percent of the funds available for Haiti’s recovery have been dispersed, and this has certainly slowed rebuilding.

Oxfam has called the situation a “quagmire”.  The lack of progress is not surprising given the leadership vacuum in Haiti: “[the earthquake] has brought together a weakened and struggling Haitian government, an alphabet soup of U.N. agencies, other governments from around the world and an army of private charities that some estimate at more than 10,000.”

Although the relief effort started off well, the chaos of a situation with no clear leader has stifled a true recovery and left the Haitian people in despair unnecessarily.  If the Haitian government has been unwilling or unable to lead due to the magnitude of the disaster, then another organization or country needs to step up and help Haiti organize the charities and aid dispersal.  Waiting for “someone else” to take the lead has just caused more suffering.

Ted Constan, chief program officer of Boston-based Partners In Health, said, “We need to think about getting money down into the communities to produce jobs for people because that’s the only way people are going to get on their feet economically. We’d like to see more of a ‘pull’ policy being generated around getting people out of the camps – markets, jobs, healthcare, clean water, stable housing etc.” Helping Haitians get jobs and adequate housing is fundamental to the rebirth of the country.

In the words of Rev. Sirico: “Haiti needs practical help and generous charity right now — implemented intelligently, and with a keen eye for existing conditions. We need to support aid agencies that provide water and medicine.”  This is still as true today as it was in the fall of 2010.  As much as possible, we need to support organizations that can successfully accomplish this.

Finally, as Rev. Sirico has previously stated: “In the long run, we have to look at what Haiti needs to prevent such disasters and minimize their impact. What the country needs is economic development and a culture that can support such development.  What Haiti needs are the institutions that provide protection and cushioning in cases of emergency. Most of all, it needs to develop economically.”  Hopefully, this will happen soon, but, until then, we can keep Haiti in mind, pray for the people there, remember to support the charity efforts there, and have a desire to help the country progress and develop in the future.

My editorial, “Intergenerational Ethics and Economics,” appears in the latest issue of the Journal of Markets & Morality (more details about that issue here). In this short piece I explore some of the implications and intergenerational consequences of public debt. For this I take my point of departure with the much-discussed “A Call for Intergenerational Justice,” but I also point out the importance of considering opportunity cost and how that concept has been applied in an analogous conversation about climate change. Focusing particularly on the current generations of workers, however, I observe:

Younger workers have not had as much time in the workplace to earn wages, collect benefits, and save, as those who have been working for decades and are nearing or have already entered retirement. As we learn from what has been called the “miracle of compounding interest,” small deductions of available capital at earlier points in time have major consequences for long-term growth.

In a recent piece for City Journal, Nicole Gelinas reflects on the federal government’s move to take on troubled securities from private firms. She writes,

The politicians we elect have three choices—the same choices they had four years ago. They can admit that this debt isn’t worth much and allow the financial sector to bear the consequences. They can hope that the Fed tries to use inflation to raise the price of everything else, making the debt seem a lighter burden in comparison. Or they can maintain their silence, letting the financial sector take another half-decade or more to make enough money on new ventures so that it can finally admit what it should have admitted back in the fall of 2007: bad debt is never good. At least the Fed acknowledges this strategy: it says that it’s using “time” to manage toxic securities and “minimize disruption to the financial markets.” But prolonging government control of financial markets just prolongs investors’ uncertainty.

Her conclusion underscores what I contend in the editorial about the importance of opportunity cost and the intergenerational effects of (in)action: “As the Fed notes, the cost of this policy isn’t measured in dollars but in something more precious: time. Washington’s refusal to confront the debt problem is costing millions the most productive years of their lives.”

Also in the current issue of the journal, James Alvey explores “James M. Buchanan on the Ethics of Public Debt and Default.” Buchanan has a good deal of interest to say on these questions, and Alvey concludes that “Buchanan’s favorite policy agenda, constitutional/legal limitations on public spending, deficits, and debt, needs to be revisited.”