Falling On Hard Times

"One who cannot deliver his dependents from the path of repeated birth and death should never become a spiritual master, a father, a husband, a mother or a worshipable demigod.” (Rishabhadeva, Shrimad Bhagavatam 5.5.18)

The U.S. economy has fallen on hard times lately. The gross domestic product, GDP, has been shrinking instead of growing. The unemployment rate is very high and the stock market has completely tanked since last fall. This has caused the government to feverishly adopt new plans as a means of stimulating the economy.

The Obama administration came up with a plan along with the help of the Congress. A massive spending bill consisting of thousand of earmarks, the proponents said this would give the economy the jumpstart that it needed. Another similar bill was also passed last year by the Bush administration. Both bills have proved to do little to nothing to stimulate the economy.

“’This recession might linger for years,’ President Barack Obama wrote in a Feb. 8 Washington Post op-ed. ‘Our economy will lose 5 million more jobs. Unemployment will approach double digits. Every day, our economy gets sicker.’ This was the justification for haste in passing Obama’s stimulus package. Now, six months later, with just 10 percent of the $787 billion package spent, ordinary Americans don’t think it’s working.

Fifty-seven percent told the Gallup organization that the package has had no effect or has made the economy worse. Eighty-one percent believe that it has not benefitted them personally in the short run and 70 percent believe it will not benefit them in the long run. This opinion is not without factual basis. Unemployment reached 9.5 percent in June, with nearly 3 million jobs lost since Obama’s op-ed. In July, it dipped to 9.4 percent, not because more jobs had been created, but because only 242,000 jobs were lost and some 400,000 individuals stopped looking for work and ceased to count as ‘unemployed.’” (Editorial, San Francisco Examiner, Aug 18, 2009)

Taking a close look at how economics works, one can understand the flaw in such proposals. Our economic system is considered to be a free market one. Goods and services are exchanged peaceably and voluntarily between people along with a respect for property rights and the rule of law. Government’s role in this system is to ensure that the exchanges are in fact voluntary, and that contracts and agreements are honored. If the market is left on its own, with government playing its minimal role, growth will occur naturally through the forces of competition. This has proved to be the case time and time again throughout the country’s history. From 1980 to 2001, the government did little to stimulate economic activity in the form of subsidies or other hand outs, and the result was that the U.S. economy grew at an unprecedented rate. Prior to that, recessions were very common, with GDP rates fluctuating up and down in the 1970s.

“Just as one who cuts off the udders of a cow with the hope of getting milk never acquires it, so also a state in which taxes are levied inappropriately, thus harassing the subjects, does not prosper.” (Mahabharata, 12.71.16)

According to the Vedas, the material world is made up of three gunas or modes: goodness, passion, and ignorance. The free market system is the embodiment of the mode of passion. People, through their buying and selling habits, are striving for fruitive results. The stock market is a great example of this; traders frantically buying and selling, all in hopes of turning a profit. When people are left to compete with one another, the mode of passion kicks in and economic circumstances improve as a result.

This isn’t a new idea. According the Mahabharata, a book written about five thousand years ago, a king should make sure that taxes are low for vaishyas, the mercantile class of people. The reason for this is that if taxes are high, the producers will have no incentive to produce. That will mean less money coming in to the treasury. Not only should taxes be low, but the treasury should spend money wisely and for legitimate purposes.

“The treasury of a king is meant for the protection of the army, his subjects and of righteousness (Dharma). If it is used for these purposes, it will prove beneficial. On the other hand, if the treasury is misused, it will prove disastrous. Should the king use the royal treasury for his wife and children and to fulfill his own sensual pursuits, it will bring him unhappiness and he will attain hell.” (Shukraniti 4.2.3-5, taken from Purpose and Function of Government According to Mahabharata)

Contrast this with today’s leaders and their policies. The recent stimulus packages are nothing more than the taking of money from one group of people, the producers, and transferring it to another group, the non-producers. Such a plan is destined to fail.

So why the sudden downturn in the economy? As with any system based on the mode of passion, the health of an economy will always go through ups and downs. The same way that some business fail and others succeed, the economy is not guaranteed to grow every quarter of every year. Though things look bleak now, objectively speaking, the standard of life in America has never been better. Even with a bad economy, every material comfort is at our fingertips. Keeping this mind, the government should shift its focus to more important areas. According to the Vedas, a person should not be a king or a leader unless he can deliver his dependents from the cycle of birth and death. Whether the economy is good or bad, the soul is eternal. If we do not train ourselves to always be thinking about God, then we will be forced to accept another body after this life. A government’s primary duty should be to elevate people to the mode of goodness by providing them spiritual guidance. The opportunity today is great since such knowledge is almost completely absent in society.

The best spiritual education in this age comes from chanting the holy names of God, “Hare Krishna Hare Krishna, Krishna Krishna, Hare Hare, Hare Rama Hare Rama, Rama Rama, Hare Hare.” This is the beginning of spiritual life and it costs nothing. Chanting pays dividends higher than any stock or government stimulus plan. If our consciousness is always linked with the Supreme Lord, then nothing, including a recession, can hurt us.