Has Dave Ramsey Hijacked Our Budget?

     Dave Ramsey is a popular author and radio personality who focuses on personal finance.  His teachings focus on eliminating debt at all costs, and much of his teaching has a foundation in Christianity and Biblical principles.  Ramsey uses churches throughout the country to network and spread his message that all debt is bad debt.  In a recent search on his website 49 separate class sites were found in Washington State alone, most being conducted by churches or religious organizations.   Ramsey has published 15 books for both adults and children on the subject of money, his radio program is heard on more than 230 radio stations throughout the U.S.
   This is the description on book jacket on Ramsey's best selling book:

 "The Total Money Makeover is all about "renewing your mind," using God's ways of handling money (over 800 scriptures deal with money) to be "transformed" (made over).  It's a plan to stop being "conformed" to the ways, of the world and as ridiculously broke as the rest of our culture.  And this isn't theory. It works every single time."
     While Ramsey's teachings are not bad in any stretch of the imagination they have contributed to the current false narrative, and political myth of fiscal conservatism that supposedly is sweeping the nation.  Ramsey, and his students, spread across the country in Evangelical Christian churches, overwhelmingly vote Republican.  Ramsey's teaching while possible and practical for individuals and families, are not reasonably applicable to the worlds largest economy.  The philosophies are just not transferable, and if attempted, certain disaster will come to our economy.  And yet Republican politicians continue to solicit votes by promoting simplistic, and disingenuous  eliminate all debt and reduce the size of government policies.
     In a family, positive cash flow is just about always preferable to negative cash flow.  There are times such as going to school or starting a business or perhaps making a large purchase such as a house or a car that reasonable people will feel it is ok to spend more than you take in.  However, outside of such exceptions most people will agree that spending more on monthly bills than a family earns in income is always bad.  This is not necessarily the case when transferred to a government or to the economy in general.

John Maynard Keynes

    Basic Keynesian economic theory states that in a recession as the economy contracts, and the private sector fails to produce enough economic activity to make up for that contraction, that the government should step in and make up the difference in possible economic activity through increased government spending and employment.  In this case, deficit spending is good and will lead to quicker economic recovery.  This is quite different than how a family or Individual should operate.
      In an economy such as the US where 70% revolves around consumer spending, any dip in in economic output, especially related to job loses which dramatically curtail consumer spending is highly damaging.  And yet, in the midst of the worst economic slowdown in decades, we are drastically cutting spending.  In a widely reported story the Commerce Department recently released figures confirming that reductions in state and local government spending has slowed the economic recovery.  Even Goldman Sachs is worried about excessive austerity measures, and how they may slow economic growth.
     Dave Ramsey would question how moral our excessive federal deficit is.  We are leaving a huge burden that future generations will be forced to deal with, and difficult choices will need to be made because of the massive debt.  Some of those difficult choices are being made as we speak.  House Republicans pledged before the election to cut $100 billion from this years budget, and are attempting to cut much of that amount.  And while cuts are needed, where those cuts come from say much about our priorities and what we value.
     As we examine proposed cuts and, even just look at our current budget, much like a family, where we spend our money reflects what we hold dear.  Some families, decide having a new car every two years is how they want to spend their money, and lease or take out a loan in order to do so.  Ramsey, suggests only purchasing a car in cash, and even trading your payments in for a fully paid off car in order to pay down other debt.  Others, decide vacations and travel are important and allocate funds accordingly, some value education, or having the latest fashions.
     As a nation we too must examine where our priorities are.  As we enter serious budget debates we must remember that not only is the huge debt we will leave future generations a moral issue, but so too is  how we decide to spend our money.  Sojourners, a faith based organization that focuses on politics and culture, has long made the argument that "Budgets are Moral Documents."  If our federal budget reflects our priorities as a nation, what does that say about us?
     As anyone who is following the debate over the budget knows, almost 2/3 of the budget revolves around defense, social security and medicare and medicaid spending.  None of these categories are currently being proposed for serious budget cuts, but rather the vast majority of these cuts are being proposed in the 14% of the budget that involves social safety net programs.  The entire non-military discretionary budget for 2010 was $491 billion.  The deficit for  2010 was roughly $1.3 trillion.  Do the math.  We can't be serious about cutting the deficit without cutting both defense spending, and continuing to reform healthcare and Social Security.  Cutting the $100 billion, or even the $61 billion now being proposed, strictly from non-military discretionary spending will devastate these social programs at a time where they are more important and more needed than ever.
     While, protecting seniors and the disabled, through Social Security is an important priority along with providing medical coverage through medicare and medicaid, spending 20% of our budget on national defense is a poor reflection of what our national priorities should be.  As seen by the chart, the amount of resources we pour into the military compared to other countries is just staggering.  Our priorities as a nation must change.
     In his State of the Union speech, President Obama highlighted several areas of investment which he believed, as a country we must make a priority in order to continue to compete in the global economy.  One of these areas was education.  We currently spend just 3% of our federal budget on education, and while most education spending comes from the states, most states are being forced to make drastic, even draconian cuts to their education budgets.  If budgets are "Moral Documents," then what does it say about us that we spend only 3% on education, vs. 20% on defense.  The Bible tells us that how we treat the least of our brothers and sisters so too we treat Christ.  As we contemplate taking heating assistance away from the poor, and reducing a program that helps ensure poor women, infants and children get the nutrition they need to properly develop, we must also contemplate how these cuts reflect on our priorities.
      Dave Ramsey, may have a biblically based financial plan that works great for many families, but it cannot be transferred to our national budget through completely eliminating any and all debt.  In fact rather than look at our national budget through Ramsey's viewpoint, as I fear many have and continue to do, we must examine our budget, and the cuts that will be needed by examining our priorities and values and how our budget reflects our priorities and morals.