When the Pilgrims landed at Plymouth Rock in 1620 civilization reached the New World and a new legacy of independence and prosperity was born. The road ahead would be long and difficult for certain, but the fortitude and faith of the new arrivals would prove to be sufficient to meet the new challenges. Fleeing from religious persecution these Pilgrims would take huge risks for and with their families to provide a future that wouldn't have been available to them in the Old World. From the Pilgrims in 1620 to the Chinese and Irish in the 1800's people all over the world took an inventory of their circumstances and sailed toward the promise that the new world offered. I believe that because we are the descendants of these risk takers Americans tend to work longer hours, are more productive and generally are more prosperous than the rest of the world. Many of us to this day still refer to the "Puritan work ethic" and all that it encompasses. This is the legacy that our ancestors left us, but what legacy are we leaving for our children and grandchildren?
Taxation without representation is a concept that came into our collective consciousness and vernacular when talk in the colonies was fomenting revolution and this can be credited as one of the primary catalysts for the American Revolution. The Boston Tea Party was an extension of this thinking and a response to the Stamp Act which required American colonists to pay a tax on most printed materials. Americans traditionally have had an aversion to taxes and throughout our history and have resisted large public debt. While we have incurred debt in the past, long-term large debts and deficits have largely been a late 20th century and early 21st century phenomenon. So here we are at a precipice and as sentient thinking humans we have the ability to choose whether or not we continue down this path. I think the questions we must ask ourselves and each other are:
Is it moral to leave huge debts to generations not yet born?
Is it or can it be justified?
Do we have the right?
Is this taxation without representation?
Should it be legal?
While the concept of "Taxation Without Representation" is generally accepted as a good rule of thumb for government to abide by and it is widely believed to be a constitutional protection, it actually has no grounding in the constitution. This may be so because our constitutional framers were not in complete harmony on this issue.
Thomas Jefferson had this to say about passing debt onto posterity:
"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." --Thomas Jefferson to John Wayles Eppes, 1813. ME 13:357
(Jefferson quote pulled from http://etext.virginia.edu/jefferson/quotations/jeff1340.htm)
Alexander Hamilton had this to say:
“A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement to our nation. It will also create a necessity for keeping up taxation to a degree which, without being oppressive, will be a spur to industry.”
(Hamilton quote pulled from www.thinkexist.com)
So where do you stand? Do you believe that debt should not be passed onto future generations without exception? Do you believe that its a poor practice, but should be allowed in certain circumstances? Maybe you believe that the country benefits from debt? Whatever your opinion please share respectfully and cite you specific reasoning. Feel free to pull from any source that you deem appropriate. Let the dialectic begin!
Part 2 will focus on central banking and how it perpetrates an invisible tax on the poor and middle class.
Subscribe to:
Post Comments (Atom)
An even bigger question would be..."Does hyper debt ever work...anywhere, anytime?" The answer is absolutely NO. If you examine economic collapses historically in any country they are always precipitated and prolonged by increasing debt.
ReplyDeleteIt makes you wonder why leaders ignore history and continue down a failed course because "this time it will be different". You can only conclude that arrogance blinds godless men...or perhaps those so educated that they lack any modicum of common sense.
Josh, Good post and I like the differing quotes from Jefferson and Hamilton. Seems those two are still debating even centuries after their deaths.
ReplyDeleteA government having the right to go into debt and using that when necessary is not necessarily a bad thing. However, the problem comes when you have 8 years of escalating debt, then an economic crash. Not good. You have no room to absorb the blow.
Three key things - in my opinion - lead to this current large debt that we carry.
1. Economic Recession of 2000-2002 - businesses were not making that much money - soooooo - tax revenues were down. Add to that, we cut taxes. Not arguing the act of cutting taxes. But if you cut the revenue and do not cut the expenses, debt will mount.
2. The Afgan and Iraq wars. OK, so just after we cut taxes, while keeping our expenses relatively the same, when then added the expense of two wars.
3. The bank bail outs. Yeah, we all know too much about that one. Still not covering our expenses, we took on a huge gigantous one-time expense.
I am not sure the debt is necessarily an issue of taxation w/o representation. Since we as a nation voted for the people who made the decision to spend that money, we in a sense also voted to spend the money. We have the vote, we have free speech, etc. There is not some King in a distant land issuing a tax or in this case - spending the money. It is the very people we voted for. - A government that is of the people, by the people.
We have gotten into a reactionary state as a country. We are not looking ahead, anticipating what will or could occur in the world. So the very people we voted for, always seem to be able to justify the spending. They say we have to spend to avoid some bigger danger. Whether it is to stop Sadam and his "WMDs" that have never been surfaced, or to avoid another "crash" with banks who seem to be living fat once again.
We have gotten into a position where the government is a living breathing organism within the economy, just as much a part of it as anything else. Either through tax cutting or through big spending, the government tries to fuel the economy. I would argue that we have ourselves to blame for that - as a population. When the economy goes bad - a large majority of both wealthy and poor look to the government to straigthen things out. As long as that trend is prevalent, the Government will forever be entangled in the mess of trying to manage the economy.
Jack- I agree that most collapsing empires were precipitated by huge debts, but mostly a devaluation of the currency through poor monetary policy.
ReplyDeleteMountain Skier- Those are all great points about our current debt, but I think where taxation without representation comes into play is the huge debts being imposed upon posterity. I understand that we have the choice, but my children and any future generation will be saddled with this huge debts without ever having a right to vote or giving any consent. So what are your thoughts? I know that some debt may be justified, but certainly not the debt we've incurred? Do we have the right in your opinion to incur this kind of debt? Thanks for the comments!
Unrestrained debt always leads to increased money supply (printing), and ultimately devaluation of the currency. The only way to pay off this debt is hyper inflation...paying if off with devalued currency. It is a vicious cycle whose cost always falls on the entitled and working lower classes. Most of the middle class is rapidly melting into the lower class through scams like home equity loans. The irony of it all is that the redistribution of wealth to the non-working poor only enslaves the recipients to even greater control. This growing population continues to vote for the proponents of entitlements out of ignorance and for fear they will slip into even greater economic difficulties.
ReplyDeleteI am a capitalist to the core but what we live in is a corporate/government monopoly capitalism(not free enterprise) where the top makes the rules (and remake as they see fit) benefiting from inflation. Sort of like buying on the rise and selling short at the top.
The only solution I see, atleast for starters, is to establish term limits. No more than 6 years life time. You might also limit campaign donations to $5000.00 by individuals only. The founding fathers intended congress to consist of citizen legislators, not professionals.
I see where for future generations it could be a form of taxation w/o rep. However, it is the legacy we are leaving our children through our own choices versus some third party in another country imposing those type of of taxes. We are indebted to other countries by our own choices and our children will have to deal with that if we do not clean it up. We had massive debt during the Roosevelt Years and the later again during the Reagan Years and then again we built up a ton of debt again in the younger Bush years. Obama so far continues to build upon that debt.
ReplyDeleteI agree that it is not a good cycle.
I agree with Jack's points on the citizen legislature. I do not think that you are going to be able to obtain term limits to that extent - six years overnight, but start some place like 12 years to begin with. That might carry more success - assuming 6 years or no years on limits or having a chance at 12,
You can call it what you like, but it does not solve the problem that our government - whether through tax cuts, big social programs, wars or whatever it is - spends like money grows on trees. It has become common practice for governemnts, companies and individuals to go into debt and constantly have debt that they owe. But I do not think that is a government problem alone. I think that is a society wide problem that exists all throughout American. What Americans do in their private lives, they will feel makes sense for government. Politicians talk about pay as you go like American's do at home. I do not believe that most americans pay as you go. I think that most Americans take out loans - home loans, car loans, credit cards, lines of credit, etc. I think that the government in American is a reflection of the greater population. Government is not the problem. The notion that you can get what you want when you want it by just carrying more debt- is a HUGE HUGE issue.
It may very well be people problem since we vote in the caliber of politicians we have....but this hasn't cleared the politians of guilt who with the willing colusion of special interests and the media have dumbed down the electorate to the point of colossal ignorance of how their liberty has been hi-jacked. These same people have become so brazenly corrupt that they simiply don't hided much anymore. Check out this video and we can talk some more. http://thinkbigworksmall.com/mypage/player/tbws/23088/1162246
ReplyDeleteI had a really eloquent post written out and I accidentally hit the back button. :-) So instead I'll leave you with words from Thomas Paine's Common Sense:
ReplyDelete"SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by wickedness; the former promotes our happiness positively by uniting our affections, the latter negatively by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher."
I agree with him that government and society are not the same and that they are distinct and seperate. Do we have some control? Yes. Have we also lost some control? Absolutely. I think we need to make big changes now while we still have the power to do so, we need to recognize the threats and eliminate them.