McClaughry: Thomas Jefferson and public debt

By John McClaughry

Thomas Jefferson was a fanatic on the subject of sound money. He viewed emissions of paper money with unmitigated horror.

For he saw what we have seen all too often over the past 13 years – and which we must certainly see again before long: a flood of increasingly worthless paper causing “a general demoralization of the nation, a filching from industry of its honest earnings, wherewith to build up palaces, and raise gambling stock for swindlers and shavers, who are to close their career of piracies by fraudulent bankruptcies.”

For Jefferson, deficit spending was simply and unarguably immoral. Government debt would, he believed, lead us into an “English career of debt, corruption, and rottenness, closing with revolution.” His prescription was straightforward: hold government expenditures to a minimum, raise the funds to meet those expenditures by taxation, and plan to collect a surplus to extinguish the public debt. He even advocated a constitutional amendment prohibiting the federal government from incurring debt at all and denied that government had the power to make paper money legal tender for private debts.

When our present day leaders – of both parties – accept the idea that they can run enormous federal deficits year after year … when they accept the idea that printing new money is less painful than cutting spending or raising taxes … they accept ideas that Jefferson would have branded not only as economically disastrous, but as morally repugnant.

John McClaughry of Kirby is the founder of the Ethan Allen Institute.

3 replies »

  1. John is quite correct and , you’ll notice that NONE of our elected officials to teh DC swamp want to address the crushing debt issue instead, they invent ways of even MORE debt.

    I’d like to know from what writings did John quote Jefferson from .

    I also found this from the 10th amendment center that adds to what john offered today;

    NOTE: I dont think that Mansion-style embassies were on the front burners of any of the founders either.

  2. Thank you, John McClaughry for pointing this out, as obvious as it may be for people of common sense. This debt will be a millstone around the neck of future generations, imposed by democrats who love to throw around the word “unsustainable” in environmental matters, but never think it applies to fiscal policy.

  3. The whole truth is that Jefferson thought that each state should issue its own money not the federal government. Anyone opposed to the Fed issuing money, the solution is simple, anytime you get any of it just purchase something with it that to you will hold its value. If mortgage companies are currently willing to lend money out for 30 years for less than 3.5%, to me that seems to be a pretty good indicator that Fed issued money is going to be pretty reliable for a while. But if you’re worried I have some scrap brass and copper I could sell you as a hedge against the printing of more fiat money. Have a good Thanksgiving John!