Monday, May 10, 2010

The Evolution of Thought

The following are four quotes from founding father Thomas Jefferson on the nation's credit and the wisdom of borrowing money.

"Though much an enemy to the system of borrowing, yet I feel strongly the necessity of preserving the power to borrow. Without this, we might be overwhelmed by another nation, merely by the force of its credit." --Thomas Jefferson to the Commissioners of the Treasury, 1788. ME 6:423

"I am anxious about everything which may affect our credit. My wish would be, to possess it in the highest degree, but to use it little. Were we without credit, we might be crushed by a nation of much inferior resources, but possessing higher credit." --Thomas Jefferson to George Washington, 1788. ME 6:453

"Though I am an enemy to the using our credit but under absolute necessity, yet the possessing a good credit I consider as indispensable in the present system of carrying on war. The existence of a nation having no credit is always precarious." --Thomas Jefferson to James Madison, 1788. ME 6:455

"I wish it were possible to obtain a single amendment to our Constitution. I would be willing to depend on that alone for the reduction of the administration of our government; I mean an additional article taking from the Federal Government the power of borrowing. I now deny their power of making paper money or anything else a legal tender. I know that to pay all proper expenses within the year would, in case of war, be hard on us. But not so hard as ten wars instead of one. For wars could be reduced in that proportion; besides that the State governments would be free to lend their credit in borrowing quotas." --Thomas Jefferson to John Taylor, 1798. ME 10:64

In 1788, Jefferson saw credit as a tool to be used sparingly in times of crisis, especially when other nations use their large credit lines against us to build armies and make war. He felt borrowing money was a necessary evil, and thought that a nation should work hard to preserve a good credit rating.

By 1798, his thoughts had evolved to the point where he no longer thought government could be trusted with the power to borrow. He realized that credit allowed government to run wild, and place its population in untenable situations, most importantly war. He felt so strongly that he wished for a constitutional amendment to strip the power to borrow from our federal government.

Jefferson foresaw what could happen to a nation who's government had access to credit. Our wars in Iraq and Afghanistan have been conducted totally on the national credit card. Thousands of American soldiers have lost their lives in these wars, and many more permanently injured. The cost of these wars has significantly expanded our national debt, placing our nation at the mercy of the financial system, which as we have all learned is a complete disaster.

If can learn anything from the current Greek debt crisis, as well as America's own experience, its that governments can and will borrow a nation past the breaking point. Whether it is done for social programs or to conduct senseless wars, government's national tendency is towards debt, which is passed on generation to generation, weakening our nation and our economy, and enslaving us all through our system of credit.

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