Jefferson wrote in 1792: “As the doctrine is that a public debt is a public blessing, so they think a perpetual one is a perpetual blessing, and therefore wish to make it so large that we can never pay it off.” Prior to 1861 it as common for American presidents to view that indebting future administrations was both immoral and unconscionable.
Bernhard Thuersam, www.Circa1865.com
Generations Living Off Future Generations
“On September 6, 1789, Jefferson admonished James Madison from Paris that the country should get straight, “at the threshold of our new government,” how we are to keep the debt from destroying the democracy. Jefferson’s premise, which he believed to be “self-evident,” is that one generation cannot – either morally or in fact – bind another.
It follows that “No generation can contract debts greater than may be paid during the course of its own existence.” The “earth belongs in usufruct [trust] to the living . . . [T]he dead have neither powers nor rights over it.” If one generation can charge another for its debts, “then the earth would belong to the dead and not to the living generation.”
Jefferson continued: “The conclusion then, is, that neither the representatives of a nation, nor the whole nation itself assembled, can validly engage debts beyond what they can pay in their own time.”
Madison wrote back that he generally agreed but thought debt was justifiable if it built a project that benefited the future taxpayer – a useful bridge, for example. Jefferson answered that the power to borrow was too dangerous to allow exceptions – any exception would expand or destroy the prohibition.
Madison’s argument seemed plausible, but Jefferson’s camel’s-nose-under-the-tent concern was right. No government will stay within Madison’s exception. World War II, the last time this country could make any kind of legitimate case for a benefit to future generations, was in fact financed 47 percent by pay as you go taxes, which provided $137 billion out of a total cost of $304 billion.
Jefferson could not get his 1798 amendment adopted, but the country got more chances to adopt Jeffersonian principles in 1994, 1995, and 1996 when Sen. Sam Nunn (D., GA) proposed a Balanced Budget Amendment. At the time, the national debt was large (about four trillion dollars) but could have been dealt with. It was not yet a perpetual debt.
Senator Nunn called his legislation the “Jefferson Amendment.” It required that Congress balance expenses with revenues [and] the public constantly supported Nunn’s amendment by 75-percent margins. But he was defeated by the Clinton Cabinet, which argued that the economy would crash if the federal government couldn’t borrow.
A New York senator said the amendment’s passage could “lead to the devastation of the banking industry.” With the defeat of the Nunn Amendment, the boat sailed for the Republic.”
(Just One More Thing, William J. Quirk, Can the Republic Be Restored?, Chronicles, May 2009, pg. 15)