A Financial Travesty

Posted on August 3, 2011 by Dr. Jerry Rankin in Rankin Connecting

Our national government has apparently avoided the catastrophe of financial default, but no one is happy. Seldom have we seen such a shameful lack of statesmanship in dealing with a self-imposed problem. Actually, there was no immediate satisfactory solution to a debt crisis that has been building, even beyond recently imposed aberrant policies.

For generations the public has been led to expect unlimited entitlements. It was alarming to hear the rationale for bailing out banks and financial institutions last year–”because we have an economy based on credit.” I’m not an economist nor an accountant, but any sane person knows one cannot spend beyond one’s income without eventually encountering disastrous consequences.

Anyone in leadership of a big institution or major organization knows that sometimes decisions have to be made you would not normally choose; because of certain circumstances and limited options responsible decisions have to be made. I’m not sure what would have actually happened had our government defaulted on trillions of dollars of indebtedness. I can’t even comprehend what that much money means. Raising taxes would have obviously stifled the ability of business and the private sector to stimulate the economy through job growth. Having made commitments to defense, social security and other spending programs, options for immediate significant cuts that would make a difference were not possible.

Such massive mismanagement could not be turned around in a single moment, so we have mortgaged the future even more. The time it will take to cut back programs and reach a balanced budget has been extended and is more of an illusion than ever.

I can somewhat identify with the challenge congress has faced. During my tenure at the IMB, we continued to send and support missionaries who responded to God’s call. Compelled to reach a lost world, we always believed that “money followed the missionaries” and churches would continue to give the support needed. When an economic downturn reduced giving and a declining market diminished investments the money was no longer sufficient to support current missionaries, much less to increase the numbers.

Since 80% of the budget went to support of personnel, efforts to practice austerity and cut other programs had only trivial impact. The number of personnel had to be brought in line with budget projections. In order to continue to give priority to sending career missionaries, the decision was made to eliminate the short-term categories of service and reduce the missionary force. I led the effort in convincing staff leadership and trustees. It was a decision no one wanted to make. I made the persuasive argument, but once the vote was taken broke into tears, heartbroken this action had to be taken.

It is hard to think that anyone is happy about raising the debt ceiling of the U.S. government, though there are those who readily recommended this solution. It is hard to think that anyone would want to increase the tax burden on the American people, though many advocate just that. It is hard to find consensus for eliminating beneficial programs and entitlements we have come to expect and depend on, but obviously that will have to happen in the coming years.

No overnight vote of the congress could straighten out a mess that began long ago when it became acceptable to live beyond our means. The government is following the pattern of American business which has come to rely on lines of credit, manipulation of balance sheets and fraudulent stock reports to prosper. And this just reflects individuals and families who max out credit cards, take second mortgages and continue to spend what they do not have.

Is not living on credit and leveraging the future like a ponzi scheme that is bound to crumble? We should not blame irresponsible policies for what has become an American lifestyle and a financial travesty. It brought down Bernie Madoff and will destroy our prosperity as well.

One Comment on “A Financial Travesty”

  1. Kevin Shearer

    Dr. Rankin,

    These days have been building with intentionality since 1993. Both the legislative and administrative branches colluded in creating the current debt disaster at that point. I saw it coming and spoke out against it, knowing the high cost mission agencies would pay if the economic philosophies were followed.

    That being said, I believe that they were “permitted” because of our moral and spiritual shift–leap–away from a commitment to Christ Jesus. I refer not only to secular America, but also to the church. While blindness may have begun in the “world,” it has systematically enveloped the church in America.

    I do not know if there is a remedy (Proverbs 29:1); but I do know we Christ-followers must pray that God shows mercy for the Lord Jesus’ and the gospel’s sake.

    Respectfully yours,

    Kevin Shearer

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