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Writer's picturePhil Williams

Spend it like you've got it

We’ve all had times when we had to rob Peter to pay Paul. By that, I mean that I’m sure that most folks have had those days when paying one bill meant not paying another. Maybe you’ve had times when some very important bills got paid on a credit card or a line of credit. It can be extremely frustrating and if you’re not careful it can get away from you in a hurry.

To this day, I’m not sure how our family made it through my late-in-life decision to go to law school. There I was in my early 30s with a wife, two kids, a dog and a mortgage and NOW I go to law school?! But with careful application of a second mortgage on the house, a little bit of GI Bill, two very modest day job paychecks and a credit card, the shell game played out for three years. It was likely a daily Rubik’s Cube of financial wizardry. Using the credit card to pay for daily trips to Birmingham for class, then pay down the balance as best we could, drawing from the credit line to pay tuition when the GI Bill was short, pay it back down, then draw it again when the regular paycheck got irregular. It was a 36-month financial tightrope, but God was faithful, I graduated, and somehow the lights stayed on and the kids always had Christmas.

My wife was often the miracle worker. She literally used to sit down every month and plan out every last dinner for the next month. Then she would take stock of what we had in the cupboard and make a shopping list for the rest. I remember once being in a group of friends and someone was complaining about the cost of groceries. I told them how Charlene handled our groceries, and they were impressed, but their appreciation turned to shock when I told them that she fed the whole family of four and the dog for around $200 a month. One lady said, “My word! I spend that every week!”

There weren’t many vacations, but the kids always had new clothes for school, and truthfully we didn’t lack for anything. In my recollection, there was a lot of laughter in the house, and we have said many times that we don’t take anything for granted as a result.

What I just described to you is what so many others have done or are doing now. The Biden economy has made that more pronounced in the last year with inflation hitting 40-year highs. My family learned firsthand what it means to live within our means. Do we have some debt? Sure! We’re still paying that mortgage on our beautiful home but generally speaking, we are doing what many of you are doing as we strive to live within our means.

Unless, of course, you are the federal government, because apparently the federal government is allowed to operate in a spending deficit at every turn. “Deficit spending” is a term that every American should know firsthand. As defined by Merriam-Webster’s Dictionary deficit spending is “government spending, in excess of revenue, of funds raised by borrowing rather than from taxation.” Borrowing, but what about repaying?

The bottom line is that where Charlene and I threaded the financial needle to get through law school with the understanding that every dime of debt incurred would have to be repaid, Congress does not feel that same pinch. Deficit spending is illusory. It presents to the world the false notion that you’ve got it when you don’t. Deficit spending is essentially spending more than you’ve got, but somehow in the halls of Congress that is allowable …. again, and again and again.

Every year the United States Government collects revenue from taxes and spends it on a multitude of public policy positions, programs and agencies. If in any given year it spends more than it earned then the annual US budget will result in a deficit. To cover the deficit, the fix is to incur debt by virtue of the U.S. Treasury selling securities like Treasury bills, notes, bonds and savings bonds to the public, just like an individual who spends more than what he earns will have to borrow the missing amount from a credit card. The accumulated deficits year after year form the outstanding U.S. national debt, which by the way currently exceeds $30 trillion. But hey, just spend it like you've got it!

This past week, a number of moderate Republicans, including Alabama’s retiring Senator Richard Shelby, joined with Democrats in the U.S. Senate to hammer out and pass the latest omnibus spending bill. A roughly $1.7 trillion spending extravaganza that comes at a time when the national debt sits at epic highs.

The budget Spend-o-Rama in D.C. got me wondering: has there been a government leader in modern U.S. history who worked to reduce our public debt in a meaningful way? Is it possible for any public leader to have the political will to reduce spending and move the U.S. government into a more fiscally responsible position? You may be interested to know that there was, and his name was President Calvin Coolidge.

I read a biography on Coolidge recently and came to an appreciation for the man. His bio from the Coolidge Foundation relates that John Calvin Coolidge was born in Plymouth Notch, Vermont, on Independence Day, July 4, 1872. His family led a very simple life and Coolidge worked from the time he was very young. Coolidge entered the practice of law and eventually found his way into Massachusetts state politics, eventually becoming governor. In 1919, the nation watched him as a national leader who stood with resolve when he sided with the Boston Police commissioner against striking Boston policemen. Coolidge’s tough stance on the strikers put him in the national spotlight and revealed him as a man of strong will and capable of direct action. “There is no right to strike against the public safety by anybody, anywhere, any time,” Coolidge proclaimed.

Coolidge was elected to the office of Vice President of the United States in 1920 and assumed the presidency upon the sudden death of President Warren G. Harding in 1923. In 1924, Calvin Coolidge was elected president in his own right.

Under Coolidge, the federal budget was balanced and the national debt was reduced. It is said that he sat for hours with his advisors poring over budget numbers and cutting costs with a passion. When Coolidge left office in 1929, the federal budget was actually lower than when he arrived at the White House 67 months before. In his words, “I am for economy, and after that I am for more economy”.

The nation is said to have fared so well under Coolidge that people spoke of “Coolidge Prosperity.” The Coolidge years were those of great technological advances, with many Americans’ homes electrified, the automobile became widespread, and the transatlantic flight of Charles Lindbergh wowed many.

Coolidge was immensely popular when he left office. He shocked many when he chose not to run for re-election in 1928, believing “the chances of having wise and faithful public service are increased by a change in the Presidential office after a moderate length of time.” Coolidge died on January 5, 1933, and is buried alongside his family in Plymouth Notch, Vermont.

Coolidge was an example of a mindset toward fiscal responsibility. It is possible, though admittedly not easy for a visionary leader to address fiscal policy effectively. Coolidge may have lived in a different time and certainly didn’t take office with the debt that we currently have on hand, but his principles, and his adherence to those principles, are timeless. Those principles are lacking right now as Congress just continues to spend it like they’ve got it.

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