Conclusion
Catholic social teaching has a long history of informed reflection on society’s socio-economic needs and challenges. However, perhaps because of the more technical macroeconomic aspects of bonds, debt and interest rates, rather than policy issues such as the fiscal elements of taxation and spending, government debt is rarely discussed. Yet as shown, debt itself, as well as the cost of interest, taxation and spending, raises considerable moral questions. Catholic social teaching and the wider Christian tradition offer considerable resources for proper reflection on these issues.
However, neither Scripture nor church teaching provides precise, detailed formulations for the acquisition, use and management of debt by government. In contemporary societies, such debt can sometimes be a useful and necessary economic tool – but it is a limited one, not least on account of the moral questions raised.
The intergenerational implications examined here are fundamental characteristics of government debt, given that all humanity, across the generations, is created in the divine image. This means that the current generation has a clear moral obligation not to burden future ones with excessive debt – an extension of Catholic principles of distributive justice. These same principles are also involved in the debates around the current balance of tax and spending, the role of inflation, systems of pensions and health care that do not involve pre-funding and indeed the proper role of government. Default on debt, whether explicit or by the creation of inflation, leads to serious moral issues related to principles of distributive justice.
The squeezing of the voluntary sector, as government has taken over functions it traditionally provided, has resulted in increased government spending – and debt – as well as obligations that are ‘off-balance-sheet’ and opaque. The outcome in terms of poverty relief has not necessarily been improved.
Both Catholic social teaching and the wider Christian tradition recognise a proper place for government, for care and provision for those in need, and the propriety of investing for the future. The latter might well suggest an appropriate use of government borrowing, to deal with emergencies and protect society from destruction by an aggressor. However, that same tradition teaches a central role for the voluntary principle, a real but limited role for government, personal responsibility for work and enterprise, and responsibility not to impoverish future generations. Furthermore, accumulation of debt can render governments unable to care appropriately for those in need or make provision for the future. In extremis it could lead to severe poverty and the breakdown of order and perhaps even of democratic government, as seen to some extent in heavily indebted eurozone countries.
These ideas and principles point to the conclusion that excessive levels of government debt sit ill with Christian teaching. It is a matter that should be more widely debated.