The Justice Chronicles, Volume 30: No Roy Moore, Character Does Count

On November 9th the Washington Post broke a story about Roy Moore who is running for Senate in Alabama. They reported that in 1979, when he was the District Attorney for Etowah County, he was well known for his attraction to teenage girls. As I write this 9 women have accused him, one of whom was 14 at the time.

Mr. Moore continues to deny any of these allegations and is giving thought to suing them.

At first several members of the Republican Party called for him to drop out of the race and even President Trump said he should drop out of the charges are true. But that has changed. President Trump now endorses him because he doesn’t want the Senate to gain another Democratic seat.

But here’s the thing: character matters. We shouldn’t respect anyone who can vote for somebody who promises to vote their way while, at the same time, has shown he is not safe around our children. Moore claims to be pro life but sees no problem being a man in his 30s who sexually assaults a 14 year old girl. Decades later he sees no problem in accusing her of lying.

We all falter sometimes in what we do and we are all works in progress. But I find no excuse in someone not recognizing this and trying to do better. He told one of his accusers that there was no point in telling anyone because “nobody will believe you”. Sure enough when she came forward, he denied her claims.

The good people of Alabama will choose their senator next month and I pray they care about Moore’s character. Running against him is Doug Jones who is a Democrat. I pray that enough Republicans look at their daughters and recognize that Roy Moore does not represent their values.

The Money Chronicles, Volume 16, The Trump Chronicles, Volume 87: National Debt vs. Budget Deficit

It strikes me that we’ve been hearing a great deal about President Trump’s promise to cut taxes.  It’s not a new promise, nearly every politician claims this.  I have to confess some amusement that these promises also claim to improve the economy.  In my last post I spoke about the false promise to close loopholes.

Here I want to talk about the difference between the national debt and the budget deficit. Alas, most of the time these two things are talked about as if they were the same thing. They’re not.

By way of explanation let me start with debt and deficit in our own households. Many of us owe money to someone. If you’re making payments on your home, or car, or credit cards, you have debt. You’ve convinced someone to lend you money to pay for something you can’t pay cash for. Your lender (likely a bank) trusts you to pay both the money and interest over time, and if you can’t they can take whatever they financed. Or, if you borrow money on a credit card and can’t pay that back, they can report you to a credit bureau and make it harder to borrow money in the future. The government borrows a lot of money. As I write this the government debt is $20,453,245,142,792.62. If you’re keeping track it’s over $20 trillion.

In other words, our government owes $20 trillion dollars. Fortunately 68% is owned by Americans. Every time you give one of your grandchildren a savings bond you own part of the national debt. You lend the government money and the government pays you back with interest after a fixed time.

That’s the good news. The bad news? While we own 68% of our debt, the rest (32%) is owned by other nations. As I write this, China and Hong Kong own 6.9%. That may not sound like much but 6.9% of $20 trillion dollars translates to $141,127,391,485, or a shade over $141 billion (I hope I have the math right). If they want, they can demand immediate payment and cause a great deal of panic in our markets.

But that’s not what concerns me the most. I’m more concerned over the need to continue to borrow money. Every year the our government spends more money than it collects, we need to borrow money to close the deficit. If we translate this into our household budgets, it’s like going to your bank and telling them that you need a loan because last month you spent beyond your means. Not only that, but you expect to come back next month, and the month after that, and…well you get the point. At some point your bank (or for that matter, your loan shark) will simply refuse to lend you more money, believing eventually you’ll just give up and stop trying to repay your debt. But if you’re the United States you can continue to print savings bonds without limit. Unless something happens to change this trend there will be a limit: there will be a point where people (and nations) will begin to distrust our ability to pay back the loans and will stop lending money.

It doesn’t have to be like this. Many of us have seen our government run budget deficits for so long that it seems like a given. But it’s not. You can read the numbers here but the last few years of the presidency of President Bill Clinton we actually ran a surplus and had the opportunity to pay down the debt.

As I write this President Trump and Congress are rolling out a tax plan that will cut taxes (and revenue) but will likely dramatically increase the deficit and debt.

Since we are currently led by a President who promises America First it’s odd that his tax policy will make us increasingly debtors of other nations.