The moral imperative of economic growth

There’s a deep malady that has taken root in American politics since the 1980s, and it is one that has only worsened in the past decade. That ailment is a fundamental disconnect between responsible government spending and the size and dynamism of the economy. Debt measured as a function of GDP skyrocketed from about 50 percent in 1990 to 120 percent at the end of 2022.

At the beginning of 1990 American GDP was just under $6 trillion. The size of the economy measured by GDP increased more than fourfold between 1990 and 2022, with GDP exceeding $25 trillion by the end of last year. So even as the economy has grown significantly over the past three decades, government debt has outstripped that robust level of growth. Debt has grown from $3 trillion in 1990 to over $30 trillion by the close of 2022.

As anyone who has tried to balance a household budget knows, there are two variables that can be addressed when facing an imbalance between earnings and spending. You can either spend less, earn more, or both. So far neither political party has actually been able to dent the growth in government spending. And while it is absolutely necessary to address government outflows, including reform of entitlements, no amount of elimination of waste, fraud, and abuse is going to have a significant impact on the budget. Perhaps it is simply politically infeasible to expect politicians to be able to deliver responsible spending policy, especially when the electorate rewards a spendthrift Congress and executive branch.

So if we bracket out the question of reining in spending, this leaves the productive side of the equation. If we want to return to somewhat sustainable historic levels of debt as a function of GDP, then we need to prioritize economic growth, not only as a political necessity but also as a social goal.

If we understand productive economic activity as a valid way of serving others by providing goods and services that are good for and valued by them, then productive economic growth is broadly aligned with Christian love. A free economy allows for each one of us to creatively explore our callings in service of others as we fulfill God’s blessing to cultivate the earth.

One of our moral responsibilities to others includes, as the Westminster Larger Catechism puts it, the duty to “endeavor, by all just and lawful means, to procure, preserve, and further the wealth and outward estate of others, as well as our own.” But beyond these more theoretical and abstract considerations, our contemporary historical situation places an even more significant premium on continued development.

The mismatch between the revenue of the federal government and its spending over the last 30 years has made continued economic growth an even more pressing moral and social imperative. And if this is true for an affluent country like the United States, then it is even more true for countries in the developing world, where global economic growth has raised billions out of poverty.

There are numerous challenges to continued economic development, however, and the steady growth of the American economy is by no means guaranteed into the future. Some misguided advocates on the domestic and global stages are actively attempting to realize a “degrowth” agenda, which would spell doom not only for the viability of our governments but for the entire system of international aid and trade, and the more than 8 billion people now living on earth. As the economist Friedrich Hayek once observed, “Like it or not, the current world population already exists. Destroying its material foundation in order to attain the ‘ethical’ or instinctually gratifying improvements advocated by socialists would be tantamount to condoning the death of billions and the impoverishment of the rest.”

We can hope and advocate for the federal government to do less, and it certainly needs to do less to restrict entrepreneurial creativity. But we also need to focus on the economy continuing to do more, on forming enterprises that promote true flourishing, creating wealth that is put to use by faithful stewards, and providing good goods and true services to every one of our neighbors in society.

Today’s realities of economic growth and government debt are harsh and the inevitable reckoning will be painful. But that pain can be redeemed if it is used in service of not only those who are alive today, but to create a better future with greater opportunities for loving service for generations to come.