On Feb. 7, Praxis invited Ivan Pongracic Sr., father of economics professor Ivan Pongracic, to lecture on the debt crisis in the United States. Over 60 students and faculty gathered in Dow A to hear his lecture.
Junior Alex Taylor, president of Praxis, said he appreciated hearing about the elder Pongracic’s experience with overspending governments.
“Its really cool to bring in someone who has real experience in governments that are spending a lot and have the levels of debt that we are coming up on, to share his own experiences and how they may soon apply to the United States government,” Taylor said.
According to Pongracic, the United States’ $20.6 trillion of debt is a ball-and-chain on the ankles of future Americans, which only a massive reduction in spending can cut. Recent miscalculated reports from General Electric Co., Enron, and WorldCom lead Pongracic to believe that the feds incentivize companies “cook their books” in order to increase GDP, and, therefore, increase general optimism about the state of the economy. Not only is the United States digging its own grave, but it’s also hiding it from the American people.
Further, he claimed the Federal Reserve and its 3 million pages of regulations contributes to the debt problem by artificially lowering the interest rate from its natural 4 to 5 percent rate.
It currently hovers around the 2 percent mark.
“Reality will hit you sooner or later,” Pongracic said. “Money created out of thin air soon disappears into thin air.”
The U.S. dollar is the World Reserve Currency. If the Federal Reserve hyperinflates the dollar to pay off the debt, the strength of the U.S. and world economies will be at stake. Pongracic said that hyperinflation in countries like Yugoslavia, Zimbabwe, and Germany gave rise to oppressive regimes, triggered wars, and initiated ethnic cleansing.
The Pongracics directly witnessed these results: Pongracic’s father was put in prison for speaking against the government, and his uncle was killed by police after being thrown from the top of a church.
Pongracic was born in Zagreb, Yugoslavia, in 1943 under fascism, before communism took over in 1945. He never joined a political party, but was able to see into the system through his auditing job. Pongracic earned a degree from the University of Zagreb in 1968. He then worked on auditing the government’s budget throughout the 1970s, during a period of staggering inflation: within the 14 years he worked in the government, his monthly paychecks soard from 14,000 dinars (around $8,700) to 1.5 million dinars (just under $1 million).
The Pongracic family emigrated to the United States in 1984 after the elder Pongracic lied to his boss, saying that he was moving temporarily to attend college. Instead, he and his family remained in the United States. The elder Pongracic studied with the late Russell Kirk, an American conservative and historian. Pongracic earned his master’s in economics from International College in 1986. The family earned citizenship in 1999.
Pongracic taught History of Economic Thought and Money and Banking at Indiana Wesleyan University from 1986 until retiring in 2013.
Ivan Pongracic Jr., an economics professor at the college, said his father was inspired to move to the United States based on the individualism depicted in American pop culture.
“One common theme to those western movies was self-reliance and rugged individualism. He really thought that that’s the way Americans were,” Pongracic Jr., said. “That’s what he admired and that’s what he wanted to be a part of, and it was disappointing to find that in fact there are so many Americans that are not into that at all.”