Alexander Hamilton said debt is a blessing: It oils the wheels of business and enhances national power. Jefferson said debt is a curse: It binds future generations without their consent, striking at the very heart of the Republic—the consent of the governed. Bloomberg News reports (February 9) that the so-called financial crisis has added $9.7 trillion in borrowing and guarantees to the national debt. In one swoop, the national debt jumped from $10 trillion to $19.7 trillion. Hamilton has won. The country is burdened with a perpetual debt—a debt that cannot be repaid.
On November 26, 1798, Thomas Jefferson wrote to John Taylor that we need one more thing to complete the Founding Fathers’ work:
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 to the genuine principles of our Constitution. I mean an additional article, taking from the federal government the power of borrowing.
Lyndon Johnson and George W. Bush understood that the people would not pay taxes to pay for their unpopular wars. They could only be financed by borrowing. The cost had to be hidden. Yet, the cost must be paid, and the cost of evading the basic democratic check is horrific: The citizenry is alienated from the government.
On...