Friday, August 21, 2009

Part Two: The Constitutional Powers of Congress

We continue today with our series on the U.S. Constitution and the powers granted to the legislative branch of government, otherwise known as "The Congress," in Article 1, Section 8:

The second provision:

To borrow money on the credit of the United States;

If the Founding Fathers could speak to us today, they might tell us they are sorry they inserted this clause into the Constitution. From the writings they left us there is no doubt that they had mixed feelings about granting the new government the power to borrow money. They realized that there would be times when it would be necessary, as it had during the Revolutionary War when men like John Adams and Ben Franklin, neither a fan of debt, were sent to Europe to obtain loans to finance the rebellion against Great Britain.

Franklin said, "Think what you do when you run in debt; you give to another power over your liberty."

Thomas Jefferson once wrote: "The maxim of buying nothing without the money in our pockets to pay for it would make our country one of the happiest on earth." True, it was Jefferson who in his first term as president arranged for the $15 million Louisiana Purchase (as much for national defense reasons as any other). But he was also an advocate of quick repayment of debt, public or private.

Passing debts from one one generation to the next, the majority of the Founders believed, was immoral. It was, in a very literal sense, "taxation without representation." The despised the government of England for the practice of perpetual debt, and they had no intentions of repeating same.

It was this climate of frugality that allowed the framers to believe that the Americans would never allow their government to get too far behind in their repayment. It was unthinkable, at the time.

It took awhile before the worst of human nature reasserted itself. For the first 125 years of our nation's history, the national debt was kept in check. Wartime borrowing was quickly paid off. After 1915, however, the national debt began to rise rapidly, grew during two world wars, and then exploded in the 1960s, '70s and beyond.

Today's growth in the national debt is truly staggering, even by modern comparisons.

So what happened?

A change in philosophy and a new source of revenues encouraged the American government to spend. The significance of 1916 should be obvious. It was the year of the passage of the 16th Amendment authorizing an income tax on individuals. Although Americans were told that only the very wealthy would pay a very small percentage of this tax, it quickly expanded until it covered all income levels at much higher rates.

This came during the Woodrow Wilson administration. Wilson was the poster child for the Progressive movement which believes that humanity is evolving and needs evolving political and social structures to help shape this growth. The Constitution, as written and traditionally understood, was and is an impediment to Progressive achievement.

To a great extent Progressives have won the modern argument on debt, which is to say that they do not see it as a threat to individual liberty because, for them, individual liberty is less important than collective action to "improve" society.

Given our nation's headlong rush to crushing debt levels, one wonders whether we could ever return to the frugality of the Founders, and what it would take to get us there. Pain, undoubtedly, but will it be any greater than the pain that is in store for us if we continue, unchecked, on our present course?

We are not only spending our children's inheritance as a nation, we are now obligating our grandchildren and theirs to paying debt service and principle on debts so massive as to be unfathomable. And if the Founders were correct about the link between freedom and frugality, I very much fear for our posterity.

What is the fix?

Returning to other parts of the Constitution which limit the size and scope of the federal government. This will mean trimming back or eliminating programs, balancing operating budgets without economy-killing taxes, and basically saying "no" to any new expansions of government activity until we begin reversing the size of our public debt.

It means saying "no" to the Progressives among us who will not stop until they have government overseeing every aspect of our lives.

Can we fix the problem?

I doubt it. We are like a heroin addict who wants to blame the drug pusher for his problem, and who sees Methadone as his solution. He doesn't want to even think about withdrawal, which is the only way way he will break free of his curse.

A deep and frightening Depression -- as ugly as it would be -- is probably our only way out of the current mess. Yet that is the one unacceptable path on which our government leaders, of both parties, will not consider. Everything they are doing right now is exactly opposite of the cure. If debt is the problem, they are telling us that debt is the solution. If over-management of the economy is the problem, they are telling us that more management of the economy is the solution.

It is madness, but the borrowing is constitutionally permitted.

"Whenever vanity and gaiety, a love of pomp and dress, furniture, equipage, buildings, great company, expensive diversions, and elegant entertainments get the better of the principles and judgments of men and women, there is no knowing where they will stop, nor into what evils, natural, moral, or political, they will lead us."
-- John Adams, on foolish spending.



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