A penny saved is a penny earned. Who hasn’t heard those wise words? The actual Benjamin Franklin quote was “A penny saved is two pence clear,” but the point remains the same. America’s Founding Fathers certainly had their own ideas about money, debt, and banking, and they weren’t always in agreement. But overall, the men whose faces grace our bills today had some sage advice, if only we had listened.
When it comes to sensible spending, Benjamin Franklin was the master. Despite his prominence in our currency as the face of the $100 bill, his advice was to spend less. “If you know how to spend less than you get, you have the philosopher’s stone,” he said, and “Beware of little expenses: a small leak will sink a great ship.”
These lessons, it seems, we have forgotten over the years. The US federal budget in 1789 was about $639,000 – for the whole government. Now, of course, that didn’t cover quite the space the federal government does today. And adjusted for inflation, that’s the equivalent of $23.5 million in today’s money. Even in 1959, when Hawaii became the 50th state, the federal government’s budget was just $73.9 billion (about $812 billion adjusted for inflation). This year, the federal budget was $1.6 trillion – and if you’ve been following DOGE or even Sen. Rand Paul’s (R-KY) work, you know a great deal of that is squandered on all manner of things that never should have been covered by the public purse.
In 2024, the IRS collected about 2.4 trillion in personal income tax from American workers. And still lawmakers strive to increase the budget and raise the debt ceiling each year.
Speaking of debt, the national debt topped $1trillion back in 1981. Today, it stands at $47.2 trillion. That’s an astronomical amount the founders might have trouble even imagining. Remember, their dollars had thousands of times the buying power of today’s money. But with or without that fact, transactions in the trillions of dollars were simply unheard of.
James Madison and George Washington all warned against the dangers of debt. “To contract new debts is not the way to pay old ones,” America’s first president said during his farewell address. “Use public credit as sparingly as possible,” he continued. On the national debt, he told Congress once that “no pecuniary consideration is more urgent, than the regular redemption and discharge of the public debt: on none can delay be more injurious, or an economy of time more valuable.”
James Madison said, “A public debt is a public curse.” Alexander Hamilton disagreed – but only to a point. “A national debt, if it is not excessive, will be to us a national blessing,” he wrote in a letter to Robert Morris in 1781.
But today’s debt is far from “not excessive.” Hamilton wouldn’t have been a fan of the ever increasing debt limit and borrowing that Congress seems to authorize every year now. As it stands, the national debt amounts to $132,668 per citizen, which is more money than 70% of Americans make in a year, according to Statista. The interest alone is now over $1.3 trillion. It’s no wonder Thomas Jefferson called public debt “swindling futurity on a large scale.”
Thomas Jefferson also said, “I believe that banking institutions are more dangerous to our liberties than standing armies.” He warned that, if banks held the power to control currency, they could use inflation and deflation to deprive people of their property. John Adams took issue with what he called the “banking infatuation.” He asserted that only banks of deposit were honest and that those issuing paper money at interest were no better than robbers.
George Washington, despite presiding over the creation of the first national bank, argued it could “ruin commerce, oppress the honest, and open the door to every species of fraud and injustice.”
Today, the Federal Reserve sets interest rates to manipulate inflation, the dollar is no longer tied to any sort of real commodity like the silver standard used by the Founders or the gold standard that came later, an entire industry of exists to buy up and service bad debt, and banks hold so much of the nation’s money that when they get into trouble the government has to bail them out with taxpayer dollars to keep our entire economy from collapsing.
And as the national and personal debt continues to compound, this juggling act only gets harder.