Benjamin Franklin on Splurge Spending
One of the Founders who made his fortune through frugality and financial discipline was Benjamin Franklin. He had this to say concerning splurge spending.
But what madness must it be to run in debt for these superfluities! We are offered, by the terms of this vendue, six months' credit; and that perhaps has induced some of us to attend it, because we cannot spare the ready money, and hope now to be fine without it. But, ah, think what you do when you run debt; you give to another power over your liberty. If you cannot pay at the time, you will be ashamed to see your creditor; you will be in fear when you speak to him; you will make poor pitiful sneaking excuses, and by degrees come to lose your veracity, and sink into base down-right lying; for, as Poor Richard says, the second vice is lying, the first in running in debt. And again, to the ame purpose, lying rides upon debt's back. Whereas a free born Englishman ought not to be ashmed or afraid to see or speak to any man living. But poverty often deprives a man of all sprit and virtue. "Tis hard for an empty bag to stand upright, as Poor Richard truly says. (Smyth, Writings of Benjamin Franklin. 3:416.)
The Founders Policy Concerning A National Debt
The pioneers of the American commonwealth had the wisdom born of experience to know that the debts of a nation are no different from the debts of an individual. the fact that the indebtedness is shared by the whole people makes it no less ominous. The Founders knew that dire circumstances. such as war or other emergency, could force a nation to borrow, so they authorized the federal government to do so in Article 1 of the Constitution. Nevertheless, they considered it a matter of supreme importance for the survival of a free people to get out of debt and enjoy complete solvency in order to prosper. This is reflected in the declaration of Thomas Jefferson when he said:
I, however place economy among the first and most important of republican virtues, and public debt as the greatest of the dangers to be feared. (Bergh, Writings of Thomas Jefferson, 15:47.)
Should One Generation Impose Its Debts on the Next?
It has always been popular in some countries to justify the practice of passing on the debts incurred by one generation to the next for payment. This was justified, particularly in the case of war debts, by the rationalization that since war is fought to maintain the independence and integrity of the nation, future generations should bear the burden of the cost.
But this was not the view of the American Founding Fathers. They felt that the wars, economic problems, and debts of one generation should be paid for by the generation which incurred them. They wanted the rising generation to be genuinely free--both politically and economically. It was their feeling that passing on their debts to the next generation would be forcing the children of the future to be born into a certain amount of bondage or involuntary sevitude--something for which they had neither voted nor subscribed. It would be, in a very literal sense, "taxation without representation." Clearly, they said. it was a blatant violation of a fundamental republican principle.
Jefferson Considered an Inherited Debt Immoral
Thomas Jefferson was particularly emphatic on the point. Said he:
That we ar bound to defray [the war's] expenses within our own time, and unauthorized to burden posterity with them, I suppose t have been proved in my former letter.... We shall all consider ourselves morally bound to pay them ourselves, and consequently within the life [expectancy] of the majority.....We must raise, then, ourselves the money for this war, either by taxes within the year or by loans; and if by loans, we must repay them ourselves, proscribing forever the English practice of perpetual funding.(Bergh, Writings of Thomas Jefferson, 13:357-58)
The Founders Establish the Policy of Paying Debts Promptly
From the founding of the nation under the new Constitution, it became a policy of supreme importance to pay off the national debt. In his first term, President Washington wrote:
I entertain a strong hope that the state of the national finances is now sufficiently matured to enable you to enter upon a systematic and effectual arrangement for the regular redemption and discharge of the public debt, according to the right which has been reserved to the government. No measure can be more desirable, whether viewed with an eye to its intrinsic importance, or to the general sentiment and wish of the nation. (Fitzpatrick, Writings of George Washington, 32:211)
The following year the President made it clear that this was no casual suggestion to Congress, but a matter of the highest priority.
No pecuniary consideration is more urgent than the regular redemption and discharge of the public debt; on none can delay be more injurious, or and economy of time more valuable (Ibid., 33:168.)
Just before leaving office, Washington made a final plea to the Congress to exert a greater effort to pay off the national debt, if only for the sake of the next generation, He said:
Posterity may have cause to regret if, from any motive, intervals of tranquility are left unimproved for accelerating the valuable end. (Ibid, 35:319.)
The History of the American National Debt
When we trace the history of the national debt, we find that the policy laid down by the Founders has been followed by every generation until the present one. One of the charts accompanying this chapter(not included here) reflects the annual national debt from the days of George Washington to the present. (2006) By carefully tracing the pattern of these debts, we notice that after every war or financial emergency involving heavy indebtedness there was an immediate effort to pay if off as rapidly as possible. This policy was followed for the sake of the rising generation. The adult citizens of America wanted their children born in freedom, not bondage.
In our own day, however, a different attitude toward national fiscal policies has evolved. This is not only reflected in the skyrocketing thrust of an astonishing level of national indebtedness. but it has been accompanied by an equally profligate explosion in the cost of government operations, as reflected in the chart showing "Outlays of the Federal Government" 1790 to 2006."
The government outlay for the year 2006 was 2.473 trillion dollars, this is just cost of government and doesn't include spending bills, social security, medicare, and etc. We have found ourselves moving away from the founding fathers guidance about debt and we are just getting worse.
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