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I worry that people are now so illiterate that they do not recognize that the "render unto Caesar…" quote is a historical basis for the division between church and state in the Christian world. Astonishingly, they view the Government citing the quote – the origin of separation – as a threat to separation!

You should read Kennedy v. Bremerton School District.

Yea, that was a seriously disturbing opinion by the current court.

Compare and contrast it with Lemon v. Kurtzman

I agree, but I think using this saying is within reasonable bounds compared to a coach leading school-affiliated prayer. The decision even left out the religious that followed.

Such a reference might easily have been lost on his audience, in which case he would sound nonsensical at best and foolish at worst?

I suspect most Americans hearing the quote he used didn’t understand it.