Get’cha Honey for Nothin’, Get’cha Chips for Free (I want my, I want my, I want my E-B-T!)

The quickest and surest way to make things more expensive for most of us is for someone in our government to attempt to make such things “free” for some.

As I noted earlier this year, the largest “charity” in the U.S. is government (which, of course, brags about it!). Americans gave a total of approximately $3.4 billion (about $2.4 billion from individuals) to private charities in 2013. In the same year, Americans received over $600 billion from means-tested (recipients required to be below a certain income level) government programs (housing, food stamps, WIC, Medicaid, and the like). When non means-tested programs (Social Security, Medicare, unemployment, and so on) are included, the total is a shocking and staggering $2 trillion dollars.

In case you missed it, for over four consecutive years now, the number of Americans receiving food stamps (transactions are now down with an EBT card) surpassed 45 million. About 20 percent of U.S. children receive food stamps. Thus nearly one-fifth of our future electorate is being conditioned to the idea that it is government’s responsibility to make sure they are fed.

Of course, with the current size and role the government plays in our everyday lives, people have come to expect much more than food from their Uncle Sam. And liberals are intent on growing these expectations.

Given the life-changing financial decision Michelle and I made 17 years ago, anytime I see a headline containing the phrase “debt free,” my attention is drawn. This is especially the case whenever the headline is a reference to a plan or scheme devised by a liberal. Most liberals’ ideas of “debt free” involves either printing massive amounts of money or heavily taxing those who tend not to vote for democrats (or at least have no lobbyist to create tax loopholes).

As her campaign falters, Hillary Clinton recently announced her plan to do more of what liberals do best: give away other people’s money. In an effort to politically capitalize on the massive $1.2 trillion in student loan debt that is held by tens-of-millions of Americans, Clinton proposed “to make public colleges debt-free for students, to cut interest rates for people struggling with debt from loans taken out to pay for college, and to expand some existing aid programs to cover more people.”

Her campaign says that the new program would cost $350 billion over ten years, which means that it will probably cost at least twice that much. Liberals are almost as bad at predicting the future costs of federal programs as they are at climate change predictions. (The interesting thing to ponder is which bad prediction will end up costing us more.) Of course, as is almost always the case with these things, Clinton’s plan will not make college less expensive, but more so.

Clinton isn’t alone in her plan to further expand the role of the federal government in education. According to Alex Simindinger, writing in Real Clear Politics, “Affordable, debt-free college is now an economic policy plank for all the Democratic presidential candidates, who believe it resonates across political parties, across economic strata, and with young people as well as with their parents and grandparents.”

In other words, liberals have examined the political landscape and found the next new way—much to Benjamin Franklin’s dismay—to give the electorate the opportunity to vote themselves money. And “affordable?!” Social Security, the oldest, and arguably the most popular federal social welfare program, is, according to Andrew Briggs of the American Enterprise Institute, “the Titanic headed for the iceberg.” And there is virtually no political will in Washington, D.C. to do anything about it.

In 2014 Medicare—which is as popular as Social Security—cost the U.S. government $600 billion, which was just short of defense spending. This spending was nearly double Medicare’s receipts ($342 billion) for 2014. Put another way, Medicare brings in about 11% of federal tax revenue, while amounting to nearly 17% of federal spending. As John Graham of the National Center for Policy Analysis implies, “Medicare devours the federal government.”

In other words, with over $18 trillion in total federal debt, and an annual federal budget deficit of nearly $500 billion, virtually no Big Government social program is “affordable.” Of course, this includes Obamacare.

In spite of the oft-parroted notion that Obamacare is “working,” the law is much more expensive than promised ($2 trillion instead of $900 billion—Democrats will just make this up out of petty cash), fewer people are covered than promised, premiums are rising faster than promised (“23 percent in Illinois, 25 percent in North Carolina, 31 percent in Oklahoma, 36 percent in Tennessee and 54 percent in Minnesota), fewer doctors are available than promised (“42 percent fewer oncology and cardiology specialists; 32 percent fewer mental health and primary care providers; and 24 percent fewer hospitals”), and so on.

As is often the case with these programs, Obamacare was sold on a mountain of lies. Because of the desire of many Americans to receive “free” stuff from the government, and because of the refusal of far too many Americans to recognize that such things are never free, we are now saddled with another massive government program that we may never be rid of.

The idea that Americans are getting things “free” from the government may be the lie of the century. A billboard near my home illustrates well this lie:

According to its website, “Peach State provides all of the medical services covered by Medicaid and PeachCare for Kids.” In other words, Peach State is government healthcare in Georgia. PeachCare is Georgia’s version of CHIP (Children’s Health Insurance Program). As a result of the failed efforts of “Hillarycare,” but in order to get at least some expansion of the role of government in healthcare, SCHIP (as it was formerly known) was created in 1997 as a shared federal-state health insurance program for children and pregnant mothers in families whose incomes were too high for Medicaid.

Take note of the advertisement of “Free Dental & Vision Coverage” on the billboard. Such deception is replete when it comes to these Big Government programs. To quote Mattie Ross from True Grit, “You must pay for everything in this world in one way or another. There is nothing free except the grace of God.” If only more Americans were as eager for God’s grace as they were for Obama’s stash.

(See this column at American Thinker.)

Copyright 2015, Trevor Grant Thomas
At the Intersection of Politics, Science, Faith, and Reason.
www.trevorgrantthomas.com
Trevor and his wife Michelle are the authors of: Debt Free Living in a Debt Filled World
tthomas@trevorgrantthomas.com

Our Financial Story on Life Focus TV

Nearly three years ago, our family was asked to participate in a television production telling our story of debt-free living. I took the day off from teaching mathematics, and a film crew from Life Focus TV came to our home and spent most of the day with us. It was a neat experience, and we looked forward to the finished product. We had no good idea of the time frame for actual airing, and over two years later with no sign of the show, and after we started our book, we pretty much forgot about the episode.

A bit to our surprise, a friend of Michelle's contacted us today and said that she saw us on TV! It seems that the episode, "Dealing With Debt," has been out for a few months. Life Focus TV airs on a variety of Christian networks, including TBN and the Miracle Channel, as well as on PBS. Right now it seems that "Dealing With Debt" is not yet available to embed. Go here to watch it in its entirety. (We do not make a significant appearance until about 9 minutes in.)

Also, below is the video of our financial testimony that Crown Financial Ministries did several years ago (2008):

Budgeting and Stewardship

Speaking in the early 1990s, when the median price of a home was about $108,000, the late Larry Burkett asked, “What do think the price of a house would be if you couldn’t borrow to buy a house? Do you think a $108,000 house would sell for $108,000 if you couldn’t sell it to anybody with a loan?” His answer: “No way. Nor would it sell for $58,000. It would probably sell for around $28,000. Everything above that we’ve built into it through debt.” I wonder how much debt is built into the current median price of a home, which is now around $215,000.

Our attitude and behavior toward debt have made practically every large ticket item in our culture more expensive. As Ken Blackwell of the Family Research Council recently wrote, “We have become a culture addicted to instant gratification and a fixation on the material. Increasingly, concepts such as duty, self-denial, hard work, delayed gratification, and patience have been swept away.” In other words, we are a culture addicted to debt.

Forget home debt for a moment and consider the amount of automobile debt Americans have. Bad automobile debt is contributing to the credit crisis in the U.S. The L.A. Times reported late last year that, with the number of risky car loans approaching the same level as the number of risky home loans, a new credit crunch could be on the horizon for Americans.

This could mean even more trouble for Wall Street as well. We could see more of what happened recently with Bill Heard Chevrolet, the nation’s largest Chevy dealer, which shut down all of its 14 dealerships due in large part to subprime car loans.

Of course, not all debt is bad. However, as I noted in my last column, (seen here), the current economic crisis is due mostly to an “irresponsible” attitude toward debt by the federal government, lending institutions, and individuals.

Also, as I pointed out in my last column, my wife Michelle and I have lived the past approximately 10 years of our lives completely debt free: owning our home, cars, and so on. We have committed to live the rest of our lives completely debt free. The financial position that we are in has special significance given the current economic downturn.

Certainly, owning a home was the largest obstacle to our remaining completely debt free. We own our home because over a three-and-a-half-year period, from early 2000 to late 2003, before we had children and just after we had eliminated our consumer debt, we built it from the ground up, contracting it and financing it completely ourselves. We performed much of the labor ourselves, but we also had a lot of help from family and friends. (This is quite a tale in itself, and I hope someday to tell it in writing.)

Our situation was and is a unique one; I certainly would not recommend that anyone do things exactly as we did them. As I mentioned before, our path was “a calling.” However, I do believe that there are tried and true, simple financial principles that we applied, and are still living by, that would benefit most anyone.

The first thing that we did, very early in our marriage and before we were out of debt, was establish a workable budget that, with adjustments, we maintain to this day. Whether we are talking about the government, a business, a church, or a family, a good budget is essential in maintaining a healthy bottom line.

A budget can help keep you from overspending in any particular pay period or in any particular area, help you plan for non-regular expenses, such as car repairs, and help you plan for your financial future. Establishing a budget can be a lengthy process. It can take as long as a full year to get a budget working well, but the benefits are well worth the hard work involved.

Our budget has played an essential role in helping us weather these difficult financial times. I despise the rise in gas and food prices that we have experienced over the last several months. Being a family of six, these increases have hit us hard. Our budget is in constant flux, but it helps us see the adjustments in spending that we need to make, and therefore maintain sound financial discipline.

I recently moved from teaching at a private school to teaching at a public one. This decision in large part was made for financial reasons. However, it was not a rushed decision. It was one that Michelle and I weighed carefully over many months, and our budget helped guide us in this decision. (See www.crown.org for help with budgeting.)

The second and most significant thing that I came to grips with financially, after budgeting, was the biblical principle of stewardship. In my last column I said that the bottom line for anyone financially is what you own vs. what you owe. However, I was speaking there in practical terms only.

The real bottom line when it comes to money and finances, and this is the most important financial principle taught in Scripture, is that none of us really “owns” anything. The Bible says, “The earth is the Lord’s, and everything in it.” We are merely stewards, or managers, of His property. Until we come to grips with this, we can never truly understand money and wealth.

Copyright 2008, Trevor Grant Thomas
At the Intersection of Politics, Science, Faith, and Reason.
Trevor and his wife Michelle are the authors of: Debt Free Living in a Debt Filled World
tthomas@trevorgrantthomas.com

What You Own vs. What You Owe

“An absolute principle of economics,” the late Larry Burkett wrote in his 1992 # 1 best seller, The Coming Economic Earthquake, is that, “No one, government or otherwise, can spend more than he or she makes indefinitely. At some point the compounding interest will consume all the money in the world.”

Larry added that, “With so many variables in the economy, the one non-variable is this: What you own belongs to you and not to a lender.” What Larry was encouraging folks to do here was to make debt a rare thing, and to get completely out of debt as soon as possible.

In this best-seller, Larry may not have foreseen the subprime mortgage crisis, but writing about mortgages, home equity loans, and easy lines of credit, he did note that, “Clearly many American homeowners have transferred the wealth stored in their homes to the lenders. In this case, it leaves both in jeopardy. Given the wrong set of circumstances, the homeowners will default, leaving the banks with huge inventories of homes they can’t sell.”

Approximately 18 months ago, it seems that “the wrong set of circumstances,” became “the perfect storm” for many homeowners, lenders, and the government. The latest big victims of this storm: Investment bank Lehman Brothers (fourth largest in the U.S.), insurance giant AIG, and mortgage giants Fannie Mae and Freddie Mac.

Hundreds of billions of dollars will have been lost by homeowners and lenders by the time this turns around. I’m speaking here not only of those individuals who lost their homes, but also of those who have seen their homes plummet in value as a result of this mess.

With its bailout of companies “too big to fail,” its purchase of failed assets, and a pool at the Federal Deposit Insurance Corporation to insure investors in money-market funds, according to some in Congress, the total cost for the federal government in all of this will be over a trillion dollars. Of course, by “the federal government” what I really mean is the U.S. taxpayer, or better still: you and me.

How did it get to this? The details are somewhat extensive and complicated, but simply put: America had too much bad consumer and corporate debt, especially in the area of home mortgages. The better question is: Where do we go from here? There is no easy answer, but first and foremost I believe that all parties involved here: the government, lending institutions, and U.S. citizens, need a much more cautious attitude toward debt.

Even Time magazine recently noted that, “We all will have to start living within our means—or preferably below them. If you don’t overborrow or overspend, you’re far less vulnerable to whatever problems the financial system may have.” That sounds like something Larry Burkett would have said.

My wife Michelle and I can testify to this wisdom. We have now been married for nearly eleven years and for about the past 10 years we have lived our lives completely debt free. This includes owning our home, our cars, and so on.

We are not, nor have we ever been, “rich,” at least by American standards. I’ve been a public or private school teacher for the last 15-plus years. Michelle worked full time for a Christian ministry early in our marriage, but has been a stay-at-home mom for about the last 7 years. Our income over the life of our marriage has always been at or slightly above the median income for Americans.

I take almost no credit for where we are financially. Michelle has always been more financially disciplined than me. Early in our marriage, through her efforts and the ministry founded by Larry Burkett, Christian Financial Concepts (now Crown Financial Ministries, www.crown.org), I embraced the simple, wise truths put forth in Scripture concerning money and debt. In other words, we are where we are financially by the grace and wisdom of God.

Our financial path has literally been a calling. After about a year of marriage I felt God was calling us to commit to live our lives totally and completely debt free, never going into debt again for anything. I have always felt that this calling was not simply to bless us personally, but that we were to be an example to others and encourage them to trust God to provide all that they need. (A snippet of our personal testimony from Crown Ministries can be seen here.)

I am not saying that it is wrong to be in debt. However, debt should be rare (as it used to be), and any debt should be paid off in full as quickly as possible. The bottom line financially, whether we’re talking about the government, banks, corporations, small businesses, churches, or an individual is: How much do you own and how much do you owe? Let me say from experience, it is much better to own than to owe.

I plan to share more of our financial journey, including some of the struggles we’ve faced with the current economic climate and other challenges as well, in my next column.

Copyright 2008, Trevor Grant Thomas

At the Intersection of Politics, Science, Faith, and Reason.
Trevor and his wife Michelle are the authors of: Debt Free Living in a Debt Filled World
tthomas@trevorgrantthomas.com