A recent study by Connecticut hedge fund manager Ray Dalio for his book Principles for Navigating Big Debt Crises suggests an unexpected spiritual impact of the coming debt crisis. After closely examining every recovery from the brink of a sovereign bankruptcy since ancient Greece, Dalio concluded that all successful government bailouts have one necessary characteristic: the various social factions within the distressed country, from wealthy taxpayers to recipients of entitlement programs to public workers, must agree to put aside longstanding differences and share in the rescue. Not because the factions think their own sacrifice fair, but because dividing the financial pain is the only way to stop their habitual squabbling from morphing into a catastrophic civil war.
The implication for resolving our own fiscal crisis is that the energies which today are so relentlessly focused on defeating perceived political enemies – be they progressives or conservatives, Democrats or Republicans, government bureaucrats or wealthy corporate executives – will eventually have to be redirected toward a stoic acceptance of mutual forfeiture. For many this will mean being reconciled to higher taxes, for others to smaller government benefit checks, to reduced public pension payouts, to higher interest rates, or to reduced subsidies.
This mutual acceptance of reduced economic expectation may not lead to a mass outbreak of “loving thy neighbor as thyself,” but it will mean the cultural elevation of many traditionally religious beliefs: that people should be at their best when times are bad, that no one escapes a worldly trial, and that human institutions are never to be fully trusted. And the spiritual wisdom of Biblical figures who suffered unfairly – Joseph sold into slavery by his own brothers, Daniel locked in the lion’s den, and the Apostle Paul thrown into the late-night ocean – will likely have a much wider appeal.