In our opinion: Thoughts on financial responsibility

Published: Sunday, Nov. 21 2010 12:00 a.m. MST

Deseret News

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This week, as the new leadership in the U.S. House of Representatives began to make committee assignments, a curious thing happened. Positions on the House Appropriations Committee, long coveted because of the committee's powerful role in shaping the federal budget, are being turned-down. Why? Because it has become clear that the Appropriations Committee will no longer be the committee of additional discretionary spending, but instead the committee to check and cut spending.

We all know it is much easier to spend money than to save it. We also know it is so much wiser to save and invest resources to meet long-term needs than to spend on current wants. But the natural desire to consume more, coupled with available credit has led individuals, families, companies and governments to over-extend themselves financially.

Individuals eager to enjoy a lifestyle beyond their income have taken on unsustainable consumer and mortgage debt. Businesses seeking increased investment have hyped their financial performance through clever accounting. And governments eager to please constituents have authorized popular services and programs without addressing how they would be funded.

But while such decisions may have provided short-term benefits, we have now seen that the collective result of such financial irresponsibility has been dire for sustainable economic growth. As a nation, we are groaning under enormous personal ($16.2 trillion), local ($1.6 trillion), state ($1.1 trillion) and national ($13.7 trillion) debt. And these on-the-books obligations don't begin to account for unfunded pension and entitlement liabilities.

The Deseret News has made the issue of financial responsibility a core area of editorial emphasis. In our news coverage and commentary, you will see an increased focus on issues related to personal and public financial accountability. In doing so, we wish to re-enshrine those mundane but important qualities of thrift and frugality as bedrock societal values. Not only is this important in helping us marshal the courage to address our looming financial challenges, but it will be important in establishing a culture of responsibility. Financial decisions have consequences not just for our wealth, but for our character. The daily financial choices we make represent where we stand on issues of self-discipline, trust, responsibility and stewardship.

Economists and financial planners can debate endlessly what debt levels are responsible for individuals, entities or nations. The responsible extension of credit is critically important for a vibrant commercial society. Credit allows for the easy flow of commercial goods and investment in long-term productive assets. But while there may not be perfectly understood quantitative limits to what kind of debt is "responsible," we all ought to agree that debt creates a weighty moral obligation to repay.

Unfortunately, many highly observable behaviors have trivialized the moral obligations associated with financial commitments. The strategic use of bankruptcy, public bailouts and massive deficit spending all send a signal that miscalculation and overextension can be forgiven and even rewarded.

The blithe disregard for promises is a terrible message to share with the upcoming generation. Our indulgences are already leaving an unfathomable debt burden to our children and grandchildren. Will we similarly saddle them with Boomer Generation character flaws that vaunt consumption over production? In order for our children to produce more than they consume, we must warn them against the wealth and character corrosion of materialism. We must fortify them with the bracing virtues of frugality. We must prepare them to pay their way. But in order to make that lesson credible, it is time for us to pay our way as well.

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