Mass unemployment angers European youth

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[loveliberty2]

Thanks for your response. Sorry, but Thomas Jefferson's wisdom and opposition to a national debt is authentic.

Jefferson was strongly opposed to national debt. When he was elected President, his First Inaugural Address outlined the principles upon which his Administration would be based. The Federalists, he believed, had created unnecessary debt.

In "A History of deficits," the author, Rick Shenkman states, " "President Jefferson inherited an $80 million national debt (largely from the Revolutionary War) when he was inaugurated in 1801. However, tumult on the European continent allowed America's fledgling system of mercantilism to prosper from manufacturing and trade. During his tenure Jefferson was able to cut taxes, reduce the debt by half, and buy the Louisiana territory all while accumulating budgetary surpluses each year from 1801 to 1807.

"To accomplish this, Jefferson-always the proponent of a small federal government-cut military expenditures significantly. When James Madison succeeded Jefferson as President, America's foreign rivals took notice of our paltry defenses; Britain, in 1812, resolved to test the strength of our still pubescent nation. Responding to the threat of British usurpation, Madison borrowed heavily to rebuild the military-pushing the debt back toward the pre-Jeffersonian levels of $80 million.

"The debt wasn't repaid entirely until 1835 (the first and last time this has happened) under President Andrew Jackson. Public land sales in the western territories provided substantial revenue for the federal government.

Then, according to The Tenth Amendment Center:

"Federal Debt Reduction Under Jefferson

"Jefferson and Gallatin inherited a national debt of $83 million. Annual interest payments on the debt averaged about $3.1 million a year under President Adams, thus accounting for about 42 percent of all federal expenditures during those years. Jefferson and Gallatin believed that continuing to discharge these high interest payments just to maintain the debt diminished their flexibility in spending money on legitimate national purposes, such as buying foreign territory, and created upward pressure on federal taxes. They also believed that having a large outstanding debt would be a serious financial handicap should the country go to war in defense of its territory or citizens. Interest payments for the previous debt would still have to be made, the principal would be further augmented by new borrowing, and many sources of loanable capital already would be invested in government stock.

"Accordingly, Jefferson and Gallatin proposed creating an annual sinking fund of $7.3 million to be used for the dual purpose of paying interest on the debt and reducing the principal by retiring maturing bonds and buying still outstanding bonds in the market. If this plan were adhered to by Jefferson and his successors, and if no new debt were created, the national debt would be retired in 16 years. Congress passed this measure in April 1802.

"Jefferson’s purchase of Louisiana from France in 1803 for $15 million threatened his debt reduction program. However, federal revenue was so great that he and Gallatin had little difficulty paying for the purchase, all the while maintaining their debt reduction plan. Gallatin proposed to pay for the purchase by selling $11.25 million in new 6 percent federal stock, which 6 percent was added to the long-term federal debt; by borrowing $1.75 million in a temporary loan, to be paid from future Treasury surpluses; and by appropriating $2 million in cash from the current Treasury surplus. In the immediate aftermath of the purchase of Louisiana, the administration decided to increase the sinking fund to $8 million a year. In eight years, Jefferson and Gallatin managed to redeem $37.2 million of the principal of the federal debt and bring the total amount outstanding down from $83 million in 1800 to $57 million at the end of 1808."

We might note, however, that during the Administrations of all these early Presidents, debt was not incurred by efforts to "redistribute" wealth from some citizens to other citizens--an idea which would have been repulsive to all who loved liberty and knew that such a power to "take" from some to give to others in the name of "doing good" was never delegated to representatives in government by "the People" through their Constitution.

[Neidermeyer]