"We believe--or we act as if we believed--that although an individual father cannot alienate the labor of his son, the aggregate body of fathers may alienate the labor of all their sons, of their posterity, in the aggregate, and oblige them to pay for all the enterprises, just or unjust, profitable or ruinous, into which our vices, our passions or our personal interests may lead us. But I trust that this proposition needs only to be looked at by an American to be seen in its true point of view, and that we shall all consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves; and consequently within what may be deemed the period of a generation, or the life of the majority." ME 13:357
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"Ought not then the right of each successive generation to be guaranteed against the dissipations and corruptions of those preceding, by a fundamental provision in our Constitution? And if that has not been made, does it exist the less, there being between generation and generation as between nation and nation no other law than that of nature? And is it the less dishonest to do what is wrong because not expressly prohibited by written law? Let us hope our moral principles are not yet in that stage of degeneracy, and that in instituting the system of finance to be hereafter pursued we shall adopt the only safe, the only lawful and honest one, of borrowing on such short terms of reimbursement of interest and principal as will fall within the accomplishment of our own lives." ME 13:360
Thomas Jefferson, “Letter: Thomas Jefferson to John Wayles Eppes”, Thomas Jefferson on Politics & Government (1813).
http://etext.virginia.edu/jefferson/quotations/jeffcont.htm
Of course, Mr. Jefferson is right. We should not saddle our children with our debts and we are morally bound not to do so.
Economic theory, and common sense, says there are times when government must borrow and intervene in the economy, and there is wisdom in doing so. Certainly this is true in times of national crises such as wars or extraordinary disorder in the economy such as we now face.
Equally, prudence, and common sense, says that any borrowing and intervention should be carefully considered and tailored to the problem to be addressed. Now it is true that it isn’t likely, certainly not in extraordinary times, that those who propose action and measures to deal with problems and those who must approve the funds to support whatever steps are to be taken can foresee and calculate accurately what is necessary to overcome the difficulties before us. But in the present situation one can readily see the ongoing confusion and it is not comforting. After all, in the short space of a few months, several sets of alternative policies have been implemented and abandoned. Given this record, one has to wonder if the fiscal and monetary authorities of this country have any idea as to what their strategy for stabilizing the financial system and reviving the economy might be.
The latest “idea” might be called “Spectacularly Big Money”, the suggestion that the Federal government spend as much as a trillion dollars on infrastructure and other government handouts to “put people back to work”. It is further suggested that this spending be financed by borrowing and not taxation.
We all hope this aggressive increase in spending will in fact help the present situation and we will finally be able to declare victory over the forces of economic stagnation and decline. At the same time, we can say with certainty the proposed stimulus package will increase the deficit greatly and add to the burden of the next generation. Hope I am wrong, but for reasons I cannot quite explain, somehow I feel this is not going to be one of the times that a stimulus package is going to work its wonder.
At times like this I wish the Founders had not trusted to moral principles and instead added a balanced budget article to the Constitution.
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