Washington Life Magazine
Washington Life Magazine

Price of Liberty
With the war in Iraq costing millions each day, what can we learn from our nation’s past
leaders about posterity and safe guarding our financial future?

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

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,


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