Ask Chuck: Is America’s economy about to implode?
Dear Chuck,
It sure looks like Larry Burkett’s book The Coming Economic Earthquake is happening before our very eyes! Is this the big one that he warned us about?
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Economic Observer
Dear Economic Observer,
It would be hard to overestimate the number of times I have been asked this question in the past 22 years that I have worked with Crown. So, my answer is always the same, “No, not yet.” Let’s review a few key points from Larry’s book that you referenced, and then I will add my thoughts about the times we are in now.
The coming economic earthquake
Larry authored his best-selling book in 1991. Within the pages, Larry discussed economic history, the US government’s violations of biblical principles of sound money, and the plausible scenario for what could happen to the debt-fueled American economy. He was careful to say that he was not a prophet, nor could he tell the future, but he was compelled to warn about the possibility that America’s economy could be destroyed within 10 years of the publication of his book. That was 32 years ago.
Fortunately, the American economy has survived a number of very significant challenges since then, including the Great Financial Crisis of 2007–2008. Larry’s timing was way off. He was labeled an alarmist, and many discredited his thesis altogether. But let’s take a look at the argument that Larry made and compare it to where we are now, three decades later.
1. “Once the limit to which foreign investors will fund the U.S. debt is reached, a monetary crisis is not far off.”
At that time, an estimated 20% of the annual budget deficit was funded by foreign investors. That number has increased to 30% in the estimated federal budget proposed for the coming fiscal year.
2. “Government will monetize their debt. It should be noted here that the printing of money to pay the government’s bills will be one of the last, and certainly the most desperate, measures because of the potential severity of the consequences.”
An article on Schiffgold says: “Since March 2020, the federal government has added $4.7 trillion to the national debt. And as WolfStreet put it, the Federal Reserve went ‘hog-wild’ with debt monetization ... At some point, the central bankers will be faced with a choice — continue monetizing the debt and inflating the money supply or deal with surging inflation by letting rates rise. It can’t do both. And neither of these choices will play out well for the American people.”
As Larry Burkett said, “What is the national debt but the visible indicator of gross fiscal mismanagement on the part of our leaders?”
Banking Crisis
Here’s an excerpt from Larry’s book: “In a bad economy with unemployment exceeding 10% or more, many of the normally sound loans will default. This crack in the economy will be highly publicized because it will swallow up hundreds of banks, large and small, and will require a trillion dollars or more of government subsidies. Once again, the same question surfaces — where will the funds come from at a time when the economy is flagging and the government's income is declining? The same three options are available: new taxes, more loans, or printed money. Take your pick.”
Where are we now?
All of the warning signs that Larry wrote about are certainly still in play. In fact, they have been every year since he first penned the book; however, the American economy has shown incredible resilience to shocks and has expanded more than Larry may have ever dreamed or imagined. Through economic expansion and federal monetary policy, “the big one” has been staved off far longer than Larry and many other experts thought would be possible.
In Deuteronomy 28, God gave clear economic instructions to His chosen people: “And if you faithfully obey the Lord your God, being careful to do all his commandments that I command you today, the Lord your God will set you high above all the nations of the earth.” The promises for obedience that follow are for blessings of abundance and strength, including verse 12b: “... And you shall lend to many nations, but you shall not borrow.” However, the curses for disobedience would undo all their progress, including verses 43–44: “The sojourner who is among you shall rise higher and higher above you, and you shall come down lower and lower. He shall lend to you, and you shall not lend to him. He shall be the head and you shall be the tail.”
America was the largest creditor nation in the world in the late 70s but flipped to the largest debtor nation in the world by the mid-80s. Our nation is facing an ever-increasing mountain of debt and a potential banking crisis while attempting to control inflation and fight off a recession or worse. I cannot help but believe it is all related to our declining interest in obeying God. The heart of our economic problem is truly the heart problem of our people. Until we believe God is needed here, we should not expect to avoid an economic crisis.
An economic earthquake will come; we just don’t know when.
In such uncertain times, the Crown God Is Faithful devotional can offer some inspiring and practical Biblical wisdom. You can subscribe to receive daily devotionals that will help transform your finances and provide much-needed encouragement. May it be a blessing!
Chuck Bentley is CEO of Crown Financial Ministries, a global Christian ministry, founded by the late Larry Burkett. He is the host of a daily radio broadcast, My MoneyLife, featured on more than 1,000 Christian Music and Talk stations in the U.S., and author of his most recent book, Economic Evidence for God?. Be sure to follow Crown on Facebook.
