#199 Hope for the New Year

The Christian Economist | Dave Arnott

There are Ten Reasons for Hope in the New Year I often explain that as an economist, I’m a pessimist, but as a Christian, I have hope. Hope is endemic to the Christian spirit and idea. We believe God is at work, even when the US debt clock shows that each individual’s share of the $34 trillion in national debt has increased from $85,000 to $100,000 in just the last three years. Think about it: Each of your children and grandchildren owes $100,000 in national debt. Still, there is hope. Here are some economic hopes we can have for 2024. The Omniscient God From seeing God as a small g to God with a big G God IS sovereign, so He can do whatever He wants, without our help, but He chooses to allow us to join Him in his great work. I explained this concept in my last economics lesson of the semester at Dallas Baptist University because it helps us understand HOW MUCH humans should do. That’s the whole ballgame in macroeconomics: How active should monetary and fiscal policy be? For an atheist, it’s easy: Since they don’t believe there IS a God, humans have to do everything, but for Christians, or really, anyone who believes in a greater being, we have decisions to make about how active fiscal and monetary policy should be. It’s pretty easy to see that Christians should hope for less active fiscal and monetary policies in 2024. Accepting responsibility When GK Chesterton was asked, “What’s wrong with the United Kingdom?” He answered, “Me.” Increasingly, people believe that there’s nothing wrong with individuals, and what’s wrong in society. That’s why liberal college professors train their students to be activists. Their objective is to change the regulatory systems of society. Well, THEY are wrong. What IS wrong is the fallen nature of individuals, not societal structure. If folks start to see that the problem is based on the fallen nature, 2024 would be a better year. A Free Economic System From Karl Marx to Adam Smith Adam Smith explained a free-market capitalist system, where both producers and consumers could benefit in the same exchange. Karl Marx countered it with a system that calls for the oppressed to rise up and throw off their oppressors. Guess what happens next? Another revolution, followed by guess what? Another revolution. Marxism is a system of continual battles because they can always find oppressed groups. It never ends in peace. I asked my students just last week, “Do they still make you read Animal Farm in high school?” Most heads nodded. There’s a lot of Marxist thinking in the world today: People who support Hamas against Israel have been duped into believing that the smaller, weaker group is always oppressed. From socialism to free-market capitalism A Christian Economist favors a middle position, typically somewhere near the free-market end of the spectrum, where there is enough freedom to exchange goods fairly, but where government has the role of maintaining competition, and preventing monopolies. Socialism always produces monopolies that serve the supplier at the expense of the demander. It’s not even a debatable subject. From spending to saving Brazil went through a period of sustained high inflation between about 1980 and the year 2000. During high inflationary cycles, it’s not wise to save, because your money becomes worth less, the longer you hold it. This period created a culture of spending and not saving, which is still obvious in Brazil today. The US is moving that way. Before the covid pandemic, in 2019, the US saving rate was about 7%. It’s now half that, about 3.5% and total consumer credit card debt crossed the $1 trillion threshold last month. I don’t have time to unpack all the various reasons for this, but one of them is inflation, and the other is a moral hazard. The government bailed out many folks during the pandemic, and now people assume the government will take care of them. So, why save?