Bankrupt

I have heard this term used with respect to our federal government and the degree of debt we face as a nation. It sounds alarming. I wonder if alarm is the intent.

I remember the frugal ways of my parents. While we may have qualified for bankruptcy at one point (that is unable to pay debts) my parents never went through the process of “declaring”, although I remember hushed discussions around the kitchen table. For my parents, such a choice of legal declaration would have been an emotional burden greater than the 18th century debtors’ prisons that populated our early colonies. I admit to embracing my parents’ ways.  The specter of debt still frightens me. And the shame of being unable to pay looms large. But I have outgrown the unreasonable fear of debt.

It was hard to spend the money I had as a child. This miserliness was just the child’s illogical extension of the fear of debt. I guess I could have become a hoarder, but I am not sure if this is the path for such a condition.  I had a difficult time accepting the debt of medical school because I could not see it as an investment that would reap the reward of a career I now treasure. It was finally as a businessman and partner that I came to understand debt as a measure of commitment.

Our country has a large debt.  It is hard to know what to compare the debt to, that is, how to measure our assets. Often debt is compared to the Gross Domestic Product (GDP). As you can see from the graph, back in 1947 we had a higher ratio of debt to GDP.  

Historical Public Debt and Debt/GDP Ratio

I doubt there was a lot of worry back then. We had just won a world war. A common enemy can unify and focus.

I write this because I think our situation is manageable, not dire. I believe we will need to change a lot of our thoughts and our ways. Continuing to do the same in the face of such a curve would be foolish. 

I was motivated to this reflection after a breakfast with a young 4H student. He was in Boise to learn about the legislative process. At the breakfast gathering we were addressed by our Lieutenant Governor who spoke again of looming federal deficits. I wondered what this young man thought.

  He shared with me his thoughts that our country was bankrupt. He sounded a bit down, like we had our future sealed in a dismal way. Here he was at a 4H gathering but he sounded hopeless.  I wanted to talk with him more to understand his thoughts and hopes but the program and the schedule would not allow. Here is what I would have said:

Well, yes our country does have great debt. But we can pay this debt. I am committed to do so. I believe you are already paying on that commitment with me. You are building your skills. You are growing your character and your spirit. Don’t lose hope. When you are in touch with your best self, when we all are, our accomplishments will astound.

 My generation must not get in the way of your success. Our old answers will not fit for you. We must not cling to old ways out of fear.  We must not stifle your education nor steal your hopes. We must not let our fears cost you your future. Nor should you be alarmed by our fear. We boomers have had a wonderful run. I believe you have a bright future. But, yes, things will change, no doubt. And shouldn’t they?

I wonder what he would have said.

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