As we celebrate those who have
achieved remarkable financial
success in Washington, it is worth
reflecting on those individuals who
many generations earlier established the U.S.
financial and economic system that made all of
this possible, and pay tribute to the principles
that guided them.
A central goal of America’s early leaders was
to leave a positive legacy for what they referred
to as “their posterity.” That meant, among other
things, not leaving heavy debt burdens for
future generations to pay.
In his celebrated farewell address, George
Washington warned Congress and the American
people that they had a responsibility to “discharge
the debts which unavoidable
wars may have occasioned, not
ungenerously throwing upon
posterity the burdens we ourselves
ought to bear.” Thomas Jefferson
spoke with pride of his efforts “to
make large and effectual payments
toward the discharge of our public
debt and the emancipation of
our posterity from this moral
cancer.” The future was a major concern; they
understood what it would take to be revered as
good ancestors by future generations.
Alexander Hamilton gave voice to this as well.
He pointed out that “as the vicissitudes of nations
beget a perpetual tendency to the accumulation of
debt, there ought to be a perpetual, anxious, and |
unceasing effort to reduce
that which at any time
exists,” and emphasized
that he “wished to see
it incorporated as a
fundamental maxim
in the system of public
credit … that the
creation of debt should
always be accompanied
with the means of its
extinguishment.”
In his view this
was not only about
establishing sound
creditworthiness for the
new nation, it was also
about national security.
The government had borrowed heavily during
the Revolutionary War. Hamilton called the debt
that had been accumulated during this period
“the price of liberty.”
In another war, which was widely anticipated
at the time, the new nation would need to
borrow again, and therefore needed to be seen as
ARE WE MAKING
decisions today that will leave our “posterity”
with a large debt that will undermine our
economy and our security?
scrupulously creditworthy, especially by potential
foreign lenders. These concerns didn’t end with
the death of our founding fathers. “There is,”
said President Dwight D. Eisenhower a century
and a half later, in arguing against large budget
defi cits, “no defense for any country that busts
its own economy.” |
He lectured Congress: “We could not ignore
the obligation we had to future Americans
to reduce the deficit whenever we could
appropriately do so,” and later added that,
“under conditions of high
peacetime prosperity we can
never justify going further
into debt to give ourselves a
tax cut at the expense of our
children.” In his farewell address
Eisenhower warned against “the
impulse to live only for today,
plundering for our own ease
and convenience the precious
resources of tomorrow.”
We are a fortunate nation now. The economy
is growing, jobs are being created, the defi cit is
shrinking and infl ation is in check. While not
all Americans benefi t from this – many feel
threatened by technological change, the rising
costs of health care and education for their kids, |
