Billed as a “Jesus Freakonomics,” the book weds basic Christian principles with economic tools to figure out which actions and policies will yield moral outcomes. Once again, the results may surprise you.
Bob Smietana, a fellow religion writer at The Tennessean, and Charles North, an associate professor of economics at Baylor University, teamed up to tackle nine hot-button issues affecting today’s economy: gas prices, immigration, family values, environment, minimum wage, education, capitalism, CEO compensation and poverty.
“Good intentions do not assure good results, and they can at times lead to policies with perverse unintended consequences,” co-authors Bob Smietana and Charles North write. “As in the rest of life, the road to economic hell is often paved with good intentions.”
Though many Christians turn to the Bible for to help them make decisions, it’s difficult to apply its principles to the economic choices we make each day, Smietana said. By using Christian economic theory, with the goal of getting God’s gifts into the hands of as many of God’s people as possible, Smietana and North tried to project long-range implications of certain economic choices and evaluate them according to biblical criteria.
They found that what sounds moral isn’t always so. For example, the battle to raise minimum wage sounds moral, but from an economist’s perspective, granting an “earned income tax credit probably works better than minimum wage to get money in the hands of poor families,” Smietana said.
[blockquote]”You can argue all day about whether raising minimum wage is moral or not. But if the earned income tax credit gives people more money, then go with that,” Smietana said.[/blockquote]
But if the value of the dollars is reduced by inflation, because of the fiat currency we use, are they getting more purchasing power? Fiat currency steals purchasing power from the entire economy. The only cure for that, besides the obvious one of returning to a precious metal standard, is to index the minimum wage to the inflation rate. Anything else is just stealing.
I was once asked, “If it is stealing, who is getting the money?” At the time, I didn’t know the answer. I believe that I do now. No one is “getting the money”. However, those who incur debt [like the government or large financial institutions borrowing to lend] benefit when the currency is inflated. When they borrow, the principle they borrow is in today’s dollars. When they pay back the principle, it is in tomorrows inflated [reduced value] dollars. So, even though the amount of dollars borrowed is payed back, the value of those dollars is less than the value borrowed.
Example: When I started paying Social Security, the dollars I paid into the system were borrowed by the Federal Government for other things. The Government effectively gave me an IOU for the number of dollars they borrowed. They will pay back the number of dollars they borrowed at a future date. However, those dollars, even though they are the same number of dollars they borrowed, are worth less than 1/14th of the value of the dollars they borrowed, at the time they borrowed them.
This is such a convoluted scheme that most folks, although they know they are being used, don’t understand how they are being robbed.
I see this same system work to my advantage when I pay my mortgage over a number of years. The principle I pay back becomes less and less of a percentage of my income over time because I have gotten raises in salary along the way.