The Big Balancing Act

Well, greetings friends! This is John Ogwyn with commentary for the Living Church of God.

The Financial Times of London, in an article datelined October 1, 2004, ran a special report on the world economy, focusing on threats to global economic growth. One of the main portions of this article was something that focused on the U.S. trade deficit—"the big balancing act" as it was called. It was pointed out that a record $55.8 billion U.S. trade deficit in June was a reminder that one of the world's great economic imbalances has yet to be rectified. Many see this deficit as a source of great instability in the global economy. They say that a current account deficit of 5% of GDP is simply unsustainable and that something is going to have to give. Some think that perhaps the U.S. will even lapse into protectionism leading to a shrinking in the global trade. Perhaps the dollar will collapse, causing chaos in global financial markets. What's been holding the dollar up has been foreign investors. Much of that has come from Asian central banks. They have been the heavy buyers in the treasury bonds. They are buying bonds to try and stabilize their exchange rates against the dollar. This results in a potentially attractive bargain for both sides. The U.S. gets funding for its deficit while the Asian countries find ready export markets. Well, my friends, at some point deficits are going to have to trigger a downward spiral in which the U.S. is going to struggle to service the claims built up by foreigners, thanks to previous deficits.

According to Capital Economics, a London consultancy, foreigners now have net claims on the United States worth nearly 25% of the Gross Domestic Product up from less than 5% only ten years ago. Just recently the United States dollar has continued to decline. The United States dollar has been the world's reserve currency. Is that going to continue? Is the Euro going to take its place? There is tremendous pressure that is being brought to bear as a result of this economic trade imbalance. Where is it going to lead? What are going to be the consequences? How is that going to affect you and your job and your future and your family?

You know, frankly, my friends, most people don't realize where all the blessings that we have, have come from to begin with. In Deuteronomy 28 God talks about the blessings that He offers—actually to our nation when you really understand the source of the blessings that British-descended and American peoples have had. And God talks about in Deut. 28:2 that all these blessings shall come upon you and over take you if you hearken unto the voice of the Eternal your God. And He talks about how you will be blessed, blessed in the city and blessed in the field. But, it is tied in with keeping the commandments of God and walking in His ways. And, my friends, we have not been doing that as a nation. We have been turning further and further aside from it. God talks about opening up His good treasure and He says in verse 12, "You shall lend unto many nations and you shall not borrow. And the Eternal shall make you the head and not the tail and you shall be above only. And you shall not be beneath if you hearken unto the commandments of the Eternal your God."

Well, my friends, that used to be the case. We used to be the great lender nation. We lent to many nations and didn't have to borrow. That is not the case any longer. We are now the world's greatest debtor nation. God describes the curses that will come upon our people if we do not hearken to His voice and observe His commandments in all the things that He instructs us to do.

My friends, we need to understand as King Solomon was inspired to write in the book of Proverbs that righteousness exalts a nation, but sin is a reproach to any people. The moral problems that we have in this nation, the spiritual problems that we have, the seed that has been sown of moral and spiritual failure are going to reap a harvest and part of that harvest is the economic problems that are looming on the horizon and are going to come to pass if we do not change our ways and really turn to our Creator.

This has been John Ogwyn with commentary for the Living Church of God.