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.