They call it the law of supply and demand for a reason. It's more than theory. When a product is abundant and fewer people want it, that product becomes worth less. It works with currency, too.
The government has, in Lincoln's words, given its paper mill another turn. The number of dollars being created, either printed or electronically, will one day make those dollars worth less. Then the spiral of inflation will add to the increasing national debt.
Increasing? Try mushrooming. Snowballing. Multiplying.
Whether the Treasury of the United States government was bound to do this in the midst of a pandemic and an economic shutdown isn't being much debated. For to throw hungry people into the streets would have not only made the economic wreck worse, it would have been an immoral act. Try though we might, we can't find an economist who says the government should have done less this year.
(The written history of 2020 should be required reading for those who still might say, for some reason, that this nation should have a Balanced Budget Amendment. But that's another editorial.)
But even though government spending in such a trying time is necessary, let's not forget: Americans will have to pay this money back one day. With interest. If not us, then our children and grandchildren.
Are there still debt scolds out there among economists? There used to be. Which may have been one reason the study of economics was called the Dismal Science.
In one of our more dismal moods, we wrote this, in November 2013:
"Since 1996, the nation's debt has more than tripled. It has doubled in just the eight years since 2005. It's a bipartisan monster, growing during both Democratic and Republican administrations. During the eight years when George W. Bush was president, the nation's debt went from $5.7 trillion to $10.6 trillion. Since the day Barack Obama was first inaugurated, less than five years ago, it increased $6.5 trillion--from $10.6 trillion to $17.1 trillion."
It's now closing in on $27 trillion.
Not counting the war against the covid-19 virus, most of this debt has been amassed during peacetime. Not all of it, but most of it. As if Americans think the national credit card has no limit. And day-to-day living expenses can just be piled onto it without consequences.
Much of our debt, it should be noted, is held by other countries who'd like to bump us off as the world's only superpower. For best example: Red China. As we borrow more and more money from the ChiComs, what is to become of our economy if they decided to stop lending us money? What would happen if mainland China and the United States come to something other than rhetorical blows?
It should be noted that even if foreign banks and investors continue to buy our bonds long into the future, the interest on those bonds amounts to a transfer of income from Us to Them. And Them often isn't an ally.
Then there is the lackey to the national debt, inflation. Or maybe he's the person whispering behind the throne, trying to cause the most damage.
If dollars become worthless (or just worth less) and, say, a Saudi government with a barrel of oil to auction decides it wants more dollars for its crude, then those of us saving for retirement will see our buying ability considerably lessened. Your plans with that 401(k) might not meet your needs later, should inflation cause prices of everything to go up.
During emergencies, such as the financial panic of 2008, or the coronavirus shutdown, the government was able to come to the rescue. But what happens when it goes so deeply into debt that it can't help? Who will come to the rescue of the rescuer?
So are we saying that the government should increase taxes and decrease spending during a national emergency? No, we aren't saying that. Here's what we are saying, though:
We haven't heard the president say a word about the national debt in ages. The only thing memorable about his thoughts on debt is that he loved it and was the king of it. For the record, the national debt during the Trump administration was breaking records before covid-19 came ashore.
The nominee opposing him in November proposes another $5.4 trillion in new spending in the next 10 years, according to The Wall Street Journal and the Penn Wharton Budget Model.
A reckoning is coming. The stakes are great.
And the hour is getting later with every passing day.