Jewish lessons for addressing debt - opinion

Judaism provides a way of making the problems of the debt real by describing the polity to include not only those who happen to be alive today but those who will succeed us.

Israel's tycoons renege on their bonds’ debt  (photo credit: REUTERS)
Israel's tycoons renege on their bonds’ debt
(photo credit: REUTERS)
In light of the emergencies caused by COVID-19 virus, leaders at every level of government are seeking to spend more to alleviate the very real hardships caused by the disease and economic dislocation. The CARES Act and four other pieces of federal legislation enacted in 2020 cost $3.5 trillion. Then-President-elect Joe Biden called the $900 billion stimulus bill passed by Congress in late December a “down payment” on future virus-related spending. It therefore seems to be an inconvenient moment to talk about the national debt and how all this spending will be paid for.
However, there is actually no more important time because the sharp rise in expenditures should remind us that the United States has accumulated an astonishing debt and developed a habit of borrowing that will imperil the welfare and limit the opportunities of our children and future generations.
Yet, few seem to care about this vast transfer of resources from the future to the present, from the young to the old, and from those not yet born to those who have lived most of their lives. Judaism, with its emphasis on intergenerational responsibility, has important insight about the grave threat of the debt – and offers us a concrete framework that changes the monies owed from a theoretical problem too abstract and immense to deal with into a moral imperative that must be addressed.
The amount of money owed by the US government in early 2021 is over $27 trillion, approximately $82,000 per citizen. While an unfathomable amount of money, this is actually an underestimate because the federal government also has tens of trillions dollars more in unfunded commitments, including obligations to Social Security and Medicare participants. It was estimated in 2019 that state and local municipalities also owed $3 trillion, an amount that has undoubtedly increased but is not counted in statistics about the national debt.
This level of indebtedness is unprecedented in US history. Until recently, the debt had averaged about 30% of Gross Domestic Product. However, over the last few decades, a combination of increased spending and tax cuts has greatly increased borrowing. At the start of the Great Recession (2007-2009), debt was 35% of GDP but had increased to 80% of the total economy before the pandemic. The decline in revenue and increase in expenses caused by COVID massively increased borrowing so that the debt currently amounts to more than 120% of the economy. The previous record was 106% at the end of World War II, after which the debt dropped significantly.
The problem is so great and has persisted long enough that there are few heroes. It is estimated that Donald Trump increased the total projected debt by $4.1 trillion before the pandemic, in good part due to the 2017 Tax Cuts and Jobs Act ($1.8 trillion by itself). However, Biden also has proposed a set of programs that will likely worsen what the federal government will owe in total. The Committee for a Responsible Federal Budget’s central estimate calculates that Biden’s campaign pledges would increase the debt by $5.6 trillion.
THERE ARE legitimate debates about the immediate effects of the debt, especially if it increases the interest rate for other borrowers. However, what cannot be denied is that borrowing money now is a tax on future generations who must pay this money back, with interest. As a result, with no say in the matter, our children and future generations will have more limited opportunities to make their own policies, and they will have fewer roads, hospitals, social programs, and soldiers because so much of their resources will have to be used to retire the debt of their parents and grandparents. Weston Wamp, founder of the Millennial Debt Foundation, correctly observes that “We’re now looking at, without question, the greatest generational transfer of money, certainly of debt, in human history.”
Yet, few seem to care. During the 2020 political campaign, there was virtually no mention of the burgeoning debt, and few politicians at any level of either party seem willing to campaign on fiscal responsibility. Only 47% of US adults called the deficit “a very big problem” in a Pew Research Center survey published in July 2020.  Americans appear to become more concerned about the debt when the party they oppose is in power, suggesting some concern is tactical rather than honest fears about the absolute amount of debt.
JEWISH TEXTS do not say much about government borrowing, no doubt because the Jews did not have a state for 2,000 years before 1948.  However, Judaism provides a way of making the problems of the debt real by describing the polity to include not only those who happen to be alive today but those who will succeed us, a striking departure from the real-time orientation of most politics. Jews pride themselves on what they pass on from generation to generation (L’dor va’dor), and on insisting that those who are to come should be considered along with those who happen to be alive now. “I am making this covenant... not with you alone, but both with those who are standing here with us this day before the Lord our God and with those who are not with us here this day,” says Deuteronomy 29:13-14. The Talmud (Ta’anit 23a) also has an important lesson on what we owe the future:
One day, Honi Hame’agel was walking along the road when he saw an old man planting a carob tree. Honi said to him: This tree, after how many years will it bear fruit? The man said to him: It will not produce fruit until 70 years have passed. Honi said to him: Is it obvious to you that you will live 70 years? So how do you expect to benefit from this tree? He said to him: I found a fruitful world because others had planted it. Just as my ancestors planted for me, I, too, am planting for my descendants.
To make the problems of the debt real, we must move it from being solely in the realm of public finance to being seen for what it is:  a profound moral inequity being foisted on the future. Indeed, it is striking that efforts to address climate change and other environmental problems are often (correctly) described as critical to ensuring the future while something so fundamental as the national debt is ignored. The debt itself should be a focus of rabbis and others who seek to educate us about our moral blind spots.
In addition to spreading their teachings, Jews can help because they have often been associated, due to the communitarian nature of Judaism, with support for spending more on social programs. These programs certainly do have a high value, but precisely because they are important, they should be paid for. Everyone who advocates a new spending program, as well as those who propose new tax cuts, should have a way to pay for such proposals that does not impoverish the future. Furthermore, we today need to begin to pay down the debt we have accumulated as soon as the economy recovers after the pandemic. These measures are the least we owe future generations.
The writer is president of American Jewish University.