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Jefferson

Jefferson Warned Us About Debt

We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude

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“The deterioration of every government,” wrote the French philosopher Montesquieu more than 250 years ago, “begins with the decay of the principles on which it was founded.”

No one expressed more eloquently the principles on which America was founded than the prime author of the Declaration of Independence and the country’s third president, Thomas Jefferson. As the country’s national debt soars under both major political parties, I ask myself, “What would Jefferson think?”

In 1981, the country’s national debt crossed the $1 trillion-mark for the first time. It took another 15 years to get to $5 trillion. In February 2019, less than two years ago, it stood at $22 trillion. Today, it’s $27 trillion, which means we’ve added as much additional debt in nominal terms in two years as we did in our first 220 years as a nation.

If you think the debt has simply kept pace with population or inflation, think again. According to the consumer price index, prices today are roughly 216 percent higher than in 1980. Population is 70 percent higher than forty years ago. The national debt, meanwhile, exploded by 2,700 percent over the same period. And this does not include a penny of the long-term, unfunded liabilities of the U.S. government, which exceed $100 trillion and which will translate into mountains of new debt as the spending it requires kicks in.

The genius from Virginia had much to say about debt. What a shame that his advice is often quoted these days but rarely followed. “I place economy among the first and most important republican virtues,” he declared, “and public debt as the greatest of the dangers to be feared.”

Even in his own day, Jefferson was offering advice that unfortunately did not make it to first base. Consider how much better off we might be today if this little gem of an idea from him had been accepted when the Constitution was written: “But with respect to future debt, would it not be wise and just for that nation to declare in the constitution they are forming that neither the legislature, nor the nation itself, can validly contract more debt than they may pay within their own age, or within the term of 19 years?”

Nonetheless, Jefferson’s view that debt should be minimal was widely held by America’s early chief executives. His successor, James Madison, once said, “I go on the principle that public debt is a public curse.” He refused to go into debt to pay the costs of the War of 1812. And it was under our seventh president, Andrew Jackson, that the national debt briefly disappeared altogether (a feat not to be repeated in the eighteen decades since).

Perhaps Jefferson’s strongest admonition on the issue came in these wise words:

We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty or profusion and servitude… A departure from principle in one instance becomes a precedent for another till the bulk of society is reduced to be mere automatons of misery… And the fore-horse of this frightful team is public debt. Taxation follows, and in its train, wretchedness and oppression.

OK, you say, all this is easier said than done. Maybe Jefferson was like most politicians who promise fiscal integrity but deliver profligacy and debt. In the eight years of his presidency (1801-1809), did he practice what he preached?

To a remarkable extent, yes he did. Despite the huge expense of the Louisiana Purchase (which roughly doubled the country’s size), the national debt fell by one-third during Jefferson’s presidency. Tariffs rose but other taxes (mostly excise taxes on whiskey and other commodities) were actually cut. As Mike Maharry wrote in his 2019 article, “How Jefferson Handled the National Debt”:

Jefferson limited federal spending, keeping total outlays flat at between $8 and $10 million throughout his presidency. The Democrat-Republicans held costs down by cutting the federal bureaucracy. And they even managed to do this with a federal workforce totaling just 130 employees.

Sometimes the debt is flippantly dismissed by declaring, “we owe it to ourselves.” That’s a beguiling but ridiculous statement echoed by economic charlatans from Franklin Roosevelt to John Maynard Keynes to Paul Krugman. For a refutation, see this 2018 article by Bart Remes. “We” and “ourselves,” Remes points out, are not the same.

Back to my question, “What would Jefferson think” about a $27 trillion national debt? I’ll venture to say he would be shocked and appalled. He would likely judge us poor stewards of the public purse, oblivious to the burden that today’s spending is foisting on future generations. He would probably say we are either drunk or mad for convincing ourselves that too much debt is nothing to worry about.

And, like so many of that wise founding generation, he would be precisely right.

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