Odom - Public debt and the common good : philosophical and institutional implications of fiscal imbalance

The American national debt stands at $20.49 trillion as of January 2018, or roughly $63,000 for every person in the United States. The national debt has grown six-fold in the past 25 years, and borrowing only has accelerated in recent administrations. What are the factors driving such unrestrained borrowing? Is American fiscal policy different now than in an earlier era? Is there a moral dimension to public debt and, if so, how can that dimension be measured?

Public Debt and the Common Good addresses these and other questions by looking to the fiscal policy of the American states. Drawing on classical themes and the longest quantitative review of state debt in the literature, James Odom expertly integrates institutional analysis with dimensions of culture to define the parameters of political freedom in a theoretically coherent way. In doing so, Odom argues that centralization and injustice, or the incapacity for the common good, can help explain state indebtedness.

Contributing to ongoing scholarly debates on public debt theory, this book will be of interest to students, scholars, and practitioners who work at the intersection of political philosophy and economics, as well as those who specialize in state public policy, state politics, and federalism more generally.

James Odom is Senior Policy Advisor to Texas State Senator Bryan Hughes. A recent Baylor University graduate, Odom has served as Director of Public Affairs at the same institution as well as a policy analyst with then-Sen. John Ashcroft of Missouri. In 2000, Odom was a candidate for the U.S. Congress from Oklahomas fourth district.

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Philosophical and Institutional Implications of Fiscal Imbalance

James Odom

First published 2019
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ISBN: 978-1-138-61816-9 (hbk)

ISBN: 978-0-429-46133-0 (ebk)

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For the Lord Jesus Christ. None of his good promises have failed.
And for Wendy and Isaac.

Credit is morality, and the exact measure of the soundness of the social state.

Junius Tracts, 1844

Money is imbued with moral meaning because, as the saying goes, money is condensed life. Money is food, shelter, clothing, and the means to other material goods that fill a human life beyond subsistence. As Michael Sandel has provided an important, recent reminder of ancient teaching, money cannot place a value on all things and can itself obscure a view of what is truly important. Still, money is the means by which physical life is sustained and for that reason is of great significance.

If morality pertains to the proper manner of living, then credit does indeed have a moral dimension. When credit is taken, the means of living of one person are entrusted to another, and a pledge to return those means, usually with compensation in the form of interest, is received in turn. Not to honor the commitment to repay is to take the sustenance for life away. Hence, the debtors reliability is revealed by his handling of the money entrusted, and his character is estimated by his creditworthiness.

Notions of reliability, faithfulness, and character may come to mind more quickly when assessing an individual borrower, particularly if one is the lender and relying on that borrower to repay. These concepts extend beyond interpersonal credit arrangements, however, to the fiscal behavior of nations. National currencies are issued and sustained with the full faith and credit of those governments. Societies have a national character, all that goes under the general and often nebulous word culture. Furthermore, how nations handle their public accounts pertains to their national character. In The Crisis of the Tax State, Schumpeter writes:

The spirit of a people, its cultural level, its social structure, the deeds its policy may prepareall this and more is written in its fiscal history, stripped of all phrases. He who knows how to listen to its message here discerns the thunder of world history more clearly than anywhere else.

As with the individual, the handling of money by national governments reveals what truly animates that polity, its priorities and objectives, and, it will be argued, its moral character, or capacity for justice.

The American national debt stands at $20.49 trillion as of January 2018, or roughly $63,000 for every person in the United States. A fiscal challenge of this magnitude has been most of a century in the making, under Republican and Democratic administrations and congresses. Norms of budget balance shared broadly by both parties came to be replaced by norms of deficit financing. For most of the postwar era, Democrats consistently have pushed for the expansion of social programs, and Republicans have favored tax cuts without commensurate spending reductions. The net result of both these enduring party objectives has been the sustained and, more recently, rapidly accelerating growth of the national debt under the Bush, Obama, and Trump administrations.