Sunday, September 30, 2012

When Caesar Steals

As Christians it is often unseemly for us to appear to be preoccupied with money.  When it comes to taxes, we are reminded of Christ's command to, "Render therfore unto Caesar the things that are Caesar's, and to God the things that are God's" (Luke 20:25).  But what if Caesar steals from you, and does it in secret?

Bear with me as I develop this line of argument with some history.  Because bartering required trading one item for another and was hugely cumbersome, societies needed something that could facilitate transactions.  Money became the means to do that.  Many things have been tried at different times and different places as money, whether seashells, gems or beads. However, in most societies, precious metals won out the competition to be used as a nation's money. Gold and silver have been particular favorites.  In most situations, there was a finite supply of these precious metals, and their value was stable.  Although you could carry around a bag of gold ingots, the metals were shaped into coins which were far more portable.  The first sign of trouble came when a nation did not have enough precious metal to pay its debts, and what would then happen is that they would mix another metal into the coin along with the gold or silver, diluting its value, in order to make their precious metal supply go further.  By reducing the base metal content of the coins, the currency became debased.

When our country was founded, the Constitiution (Article I, Section 8) allowed our government to coin money.  The legal tender in this country was gold or silver coins. Our nation's precious metals were maintained by the Treasury, which coined the money.  Not printed it. Our founding fathers recognized the dangers in utilizing paper money.  For all practical purposes there was no paper money in this country until the Civil War, and during that time and shortly thereafter there were numerous cases that went all the way to the Supreme Court which ultimately led to the establishment of paper money. The Treasury Department issued gold and silver certificates, which initially were not legal tender but guarantees to pay legal tender.  The certificates reached legal tender status in the early 20th century. 

Along comes the invention of the Federal Reserve in 1913.  They began issuing Federal Reserve Notes, which were not certificates.  They were redeemable at the Treasury for specific amounts of gold or silver, or exchangeable for Treasury gold or silver certificates.  Franklin Roosevelt's administration then got legislation passed that forbid Americans to own gold and abolished all gold clauses in domestic contracts.  Gold certificates were eliminated.  This Gold Reserve Act of 1934 then removed the ability to redeem a Federal Reserve Note for gold; it could still be redeemed for a silver certificate or silver.  The Act now also declared the Federal Reserve note to be legal tender.  By 1963, the Federal Reserve Note dropped the redemption clause, and silver certificates were eliminated.  The last remaining ties to precious metals occured in the Nixon administration, when we were taken completely off the gold standard internationally, and foreign parties could not redeem their Notes in gold. What we call a dollar today, the Federal Reserve Note in your wallet, is not redeemable in anything. Its worth is entirely dependent on how many of those things are out there in circulation. That is what we call fiat currency.

When Caesar needs money, he can raise it through taxes, which are obvious.  He can borrow it, and he does that by selling bonds, which is a promise to pay back the money at a later date to the bondholder.  Caesar still needs money to pay back the loan. Or he can print it, and increase the number of dollars in circulation, which debases the currency and lowers the value of the dollar.  As the value of the dollars drops, more dollars are required to purchase items, and the prices go up.  If you believe the Quantity Theory of Money, the ultimate cause of all inflation is an increase in the supply of dollars in the economy.  Sometimes, when the Federal Reserve wants to increase the money supply, it will purchase securities from other institutions, and it does that by simply crediting their accounts.  They do not even need to use up paper and ink.  They just create the money electronically out of thin air.  When the Treasury needs money for its debt, they only need to go next door to the Fed and knock.

The problem with the government printing or creating money is that it leads to inflation, and all the money you currently hold loses its value and purchasing power. The dollar you have in your wallet today is worth half of what it was in 1988.  Although it appears we have low inflation now, the inflation data that the government releases is calculated far differently than it was a decade ago, and it is much higher than you realize due to the manipulated numbers.  (Serious investigators can go to the government's own Bureau of Labor Statistics website and see how the Consumer Price Index is calculated, and how it is manipulated downward by a process known as "hedonics.")  And eventually, at some point in time, all of this excess money is going to lead to very real, serious inflation.  Inflation is therefore known as the "hidden tax" because we do not see it out in the open, but it is a way that the government creates money by taking from us the value of the money we have.

So how does this relate to suffering?  This is theft by the government from our savings, retirement plan, and whatever we hope to get from Social Security (if anything) in the future.  In the best case, whatever you have saved for the future will be worth half of what it is today in twenty years' time.  Although Jesus admonishes us in Matthew 6:19 not to lay up treasures here on earth, we are to be good and prudent stewards of what we are given by God.  We are not to love money or hoard money, but we are to be wise in providing and planning for our future.  Our government has shown no similar sense of moral restraint on its spending, and the Bible is full of condemnation of going into debt.  The only hope of slowing the printing of money would be to return to the gold standard, and there is little likelihood of this happening; our leaders would have to actually want to stop spending.  The people who suffer the most from inflation are the poor, whose dollars are worth less and less each year.  As a Christian I am advised to not love money (I Timothy 6:10), but we are also commanded not to steal.  If only Caesar humbly obeyed the Lord!

(I am indebted to Peter Schiff and his book, The Real Crash, for this history of money.)

Monday, September 24, 2012

Suffering and Security

It has been widely noted that one of the presidential candidates, Mr. Romney, made some remarks about the "47 per cent" of Americans that do not pay taxes and receive government benefits.  Although I understand what Mr. Romney was saying, his statement was somewhat inaccurate and the data should be understood correctly, as well as some of the logical flaws in interpreting that information. 

It is correct that nearly half of Americans do not pay federal income tax.  This data comes from the Tax Policy Center, and is an estimation.  The data can be interpreted several ways, but it is important to remember that most of these workers will be paying other taxes such as Social Security and Medicare payroll taxes.

Secondly, it is not correct to state that half of Americans receive government benefits; what is correct is that 49 per cent of American households have someone there who receives a government benefit.  This information comes from the Census Bureau.  Finally, it is important to realize that these two halves of American society are not all the same people.

Having said that, these numbers are very disturbing, and they are steadily increasing.  The number of households that receive government assistance has increased from 30% in 1983.  And this trend is part of a larger desire on the part of our fellow citizens to avoid suffering at any cost, even to the point of economic collapse of the country.  We simply do not have the ability to endure hardship, or even the risk of hardship, that our predecessors had.

We have heard of the Pilgrims and the death of 45 of the 102 settlers during that first winter.  Our founding fathers endured unimagineable hardships in beginning this country, and settlers braved dangers and disease while exploring our fledgling nation from shore to shore.  The original colonists were willing to fight and to die simply to be free of the demands of England. 

When you look at military conflicts, there were 800,000 American deaths in the Civil War; 300,00 in World War I; 450,000 in World War II; 30,000 in the Korean Conflict; and 50,000 in Vietnam.  Today, the loss of less than 10,000 brave soldiers in our Middle Eastern conflicts seems too terrible to bear by comparison. 

The one thing that all of these stories have in common was the desire for freedom.  The hardships endured and the battles fought were to be free of governmental oppression in one form or another.  For the Pilgrims, it was to be free of a religion dictated by government.  For our Revolutionary War leaders, it was to be free of the economic oppression of the British government.  And the subsequent wars and tragic deaths were to preserve the liberties of this nation and others against those who would seek to attack us and enslave others.

The opposite of freedom is enslavement, but we do not often think of enslavement as voluntary.  In fact, in the Old Testament times, slaves were released of their obligations after six years; yet if a slave desired to remain a slave he could do so in a ceremony described in Exodus 21:5-6.  What leads us to voluntary enslavement today is our desire for security.  It is our overwhelming need for security that causes us to trade away our freedoms.

No one identified this problem better than Friedrich Hayek in his book, The Road to Serfdom, wherein he described the almost inevitable decline of western societies.  The demands of the public are initially for some form of security, even at the cost of liberty for others.  Government intervention results in chaos, leading to demands for more controls, and eventually to economic dictatorship. The dependency on entitlements enslaves those who rely on the government, and those who work to pay the taxes are in servitude to the government for their labor.  In fact, Tax Freedom Day comes after April 15;  Americans who are working and paying taxes essentially donate all of their earnings from January 1st to April 23 to pay off their federal, state and local taxes.

Our country functioned without an income tax for nearly one hundred and fifty years before the Sixteenth Amendment was ratified in 1913.  We went from being a third-world sized economy to being the world's economic leader during that time.  We now have more debt than any nation has ever accumulated, and our nation is set to be permanently enslaved to that debt.  Our dependency class, our working class, and our country are therefore all in bondage because of the demand for cradle-to-grave security.  We insist on being provided food, economic assistance, unemployment benefits, college education loans, and healthcare, and for every person who is dependent on these things, someone else had to work and earn income that they do not get to keep.  Whereas our forefathers dedicated their lives to being free of the compulsions of government, we willingly slip into the embrace of security provided by a bureaucracy.

No one wants to suffer hardships, but as Dr. Thomas Sowell has so often observed, there are no solutions, only trade-offs.  And what we are trading off here is individual and national freedoms for security.  As Benjamin Franklin said, "Those who would give up essential liberty to purchase a little temporary safety deserve neither liberty or safety."



Monday, September 17, 2012

The Embarassment of Suffering

All suffering is not the same.  There are many types of suffering decreed by God to accomplish His sovereign will.  Although as we have said many times before, God works all things for the good to those that love Him (Romans 8:28), the very definition of suffering means that it is painful.

When a patient presents with pain, there are several key questions that the surgeon must ask and answer to diagnose the cause of the pain.  We ask when did it start?  Where is it? Is it constant or does it come and go?  What type of pain is it, sharp, dull, throbbing?  These types of questions help us try and determine what other tests need to be ordered, if any.  It may even be that surgery is needed to both diagnose and treat the problem. In our sufferings, one thing that we may want to know is, "Where does it hurt?"

Sometimes, in the immediate shock as our suffering begins, we sense overwhelming pain and are unable discern exactly what is going on. We may be experiencing physical pain in our body, such as when illness strikes.  We may be hurting in our heart, from loss and grief.  But one particular site of our hurt may not be readily evident, for it is an area we often hide from others, and a part of ourselves that is full of self-deception.  It is our ego, or pride.

The word esteem comes from the same source as the word we use to establish the value of things, estimate. Self-esteem, then, means our own estimation of our value. And I think that much of our self-induced suffering comes from a wrong sense of self-esteem. A falsely low self-esteem leads one to feelings of unworthiness and a host of neurotic behaviors where we try to compensate. However, the trend in society today to boost everyone's sense of self-esteem is just as deleterious. This is especially seen in our school systems, where it seems that hugely increasing every child's self-esteem is considered at least as important as actually learning or accomplishing anything. And too much self-esteem leads to narcissim, an overwhelming self-love, as we get that word from Narcissus, the Greek who fell in love with his reflection in the water. What God wants for us is accurate self-esteem, not thinking more highly of ourselves nor too lowly of ourselves (Romans 12:3).  However, it is impossible for us to know our exact worth without understanding ourselves in relationship to Christ.

Without Christ, we are dead in our sins (Ephesians 2:5) and God's enemies (Romans 5:10), and we can accomplish nothing (John 15:5).  With Christ, we are beloved by God, are saints who will rule over angels (I Corinthians 6:3), and can accomplish all things (Philippians 4:13).  With Christ as our saviour, God does not see our inherent unworthiness, but sees Christ's righteousness that is imputed to us.  So, if you believe yourself to be an unworthy creature undeserving of God's love and mercy, without Christ that is true, but in Christ you are invaluable.  If you think yourself to be a fine specimen of humanity with no need for Jesus, you are sadly mistaken.  Our value to God is not determined by who we are or what we do, but by our faith in Christ. 

In certain forms of suffering, the Evil One may attempt to attack us in our sense of self-worth.  In spiritual warfare, Satan may attack you in an area of your strength, trying to convince you of your unworthiness.  If you are a scrupulously honest person, the Devil may encourage people to spread lies about your honesty.  And if you are a Christian who is trying to serve the Lord as a missionary in another land, other people may try to humiliate you and debase you. 

However, in other forms of suffering, God may be trying to accomplish something in your life that requires that your ego take a beating.  If you are out of God's will, in sin, He will chasten you.  The purpose of that chastening is to lead you to repentance, and it is hard to repent without a sense of humility.  Yet you may be in God's will, but have some part of you that God doesn't like, that He must remove by pruning.  Those Christians who are being pruned are abiding in Him (John 15), yet they must be formed and shaped in the image of Christ, and those parts of us that are not Christ-like must be removed.  Much of what has to be shed involves pride. 

Those who suffer from spirtual warfare or persecution for their faith need not be embarassed by their affliction.  They should take comfort in their value to God through their faith in Christ and know that they would not be under these assaults except for the fact that they are children of God.  However, when we are being corrected by God or pruned by Him, it is revealing a deficiency in us, and the medication may just be a hefty dose of humility.  A little redness in our cheeks is necessary now, that in eternity our faces reflect God's glory. 


   

Wednesday, September 5, 2012

Profitable Suffering

In my forthcoming book, Surviving the Suffering, The basic premise is that all suffering is not the same. There are underlying reasons for the different types of suffering, and we must correctly diagnose which form of suffering afflicts us. Chastening is a specific brand of suffering, and it is reserved for Christians who are outside of God's will. This leads to His correction, which begins with recognition of our sin, followed by repentance, then restoration of our right relationship with Him.  One source of solace in this situation is that God chastens those He loves.  Proverbs 3:11-12 tells us, "...do not despise the chastening of the Lord, nor detest His correction; for whom He loves, He corrects."

A problem arises when we are involved with someone else who is suffering chastening because of their actions.  When a loved one, a child or dear friend, is suffering, our natural reaction is to help them with all our heart.  This may not be the best thing. Although we should not abandon them, it is best not to rescue them, either.  God is trying to teach them the error of their ways, and part of that educational experience is letting them endure the consequences of their behavior.  As Herbert Spencer said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools."  Or as others have said, "We learn good judgement from experience.  We gain experience from bad judgement."  Sometimes, in order to live well, we must first live poorly.

In the classic World War II movie Darby's Ranger's, an Englishwoman leaves her husband for a young American soldier.  She then rushes to the American military base to marry the man, and on arrival she is told the soldier has died in a training accident. She collapses to the floor upon hearing this, and the commanding officer comforts her by saying, "You made your bed, lass," without bothering to add, "Now lie on it."  I am not always talking about taking things to such an extreme.  My job often requires that I rescue people from the consequences of their behavior. Patients show up with coronary artery disease after decades of smoking and overeating, and need bypass surgery.  I don't tell them, "You blocked your arteries, now die from it."

We should never disregard our responsibility to help those in need.  But not only are you not obligated to salvage every person's situation, it may not be prudent to do so, either. There is much profit to corrective suffering. We see the failure of rescues in our day with both individual and corporate welfare.  People who have indulged in behavior known to lead to poverty and banks who have indulged in risky fiscal behavior are bailed out by taking money earned by people who have engaged in neither. What is worse is that such assistance, however well-intentioned, teaches these people and corporations nothing about responsibility.  When people are bailed out by entitlements, they feel entitled to a bailout.

It causes us pain to stand by and watch others suffering.  If it does not, then you should question your own relationship with God. Even if the suffering is merited, we must allow God to work His sovereign correction to completion. As the Austrian economist Ludwig von Mises noted, "'This time, it's different' are the four most expensive words in the English language."  Sometimes people need to learn that, no, it is not different.  If you are a Christian, you will not succeed in stupid or sinful behavior in the long run, and your folly will be expensive.  Unfortunately, some of the consequences of your behavior will hurt those around you.

Our compassion for others must not be so clouded that we obstruct correction. Stand by them or behind them, but not in front of them.