Jan. 8 marks a pivotal anniversary date for America. It marks the only time in U.S. history the national debt stood at zero: in the year 1835.
It was President Andrew Jackson that led the charge to bring the national debt to $0.
How did he do it?
History.com explained, “The elimination of the national debt was both a personal issue for Jackson and the culmination of a political project as old as the nation itself. Since the time of the Revolution, American politicians had argued over the wisdom of the nation carrying debt. After independence, the federal government agreed to take on individual states’ war debts as part of the unification of the former colonies. Federalists, those who favored a stronger central government, established a national bank and argued that debt could be a useful way of fueling the new country’s economy. Their opponents, most notably Thomas Jefferson, felt that these policies favored Northeastern elites at the expense of rural Americans and saw the debt as a source of national shame.
“Jackson, a populist whose Democratic Party grew out of Jefferson’s Democratic-Republican Party, had a personal aversion to debt stemming from a land deal that had gone sour for him in his days as a speculator. Campaigning for re-election in 1832, Jackson vetoed the re-charter of the national bank and called the debt ‘a moral failing’ and ‘black magic.’ Jackson vetoed a number of spending bills throughout his tenure, putting an end to projects that would have expanded nationwide infrastructure. He further paid down the debt by selling off vast amounts of government land in the West, and was able to settle the debt entirely in 1835.”
Outside of brief periods in our nation’s history, U.S. presidents have not been frugal and disciplined with debt management. But our founding fathers and first eight presidents did a much better job with money management than present leaders, who could learn a few fiscal lessons by turning back the clock to our early republic.
Critics decry the founders’ financial policies as too obsolete for our bloated federal bureaucracy, but resurrecting their policies and passion for bringing down the national debt would serve America well at this moment.
As Thomas West, professor of politics at the University of Dallas, explained in his excellent 2010 Heritage Foundation treatise, “The Economic Principles of America’s Founders: Property Rights, Free Markets, and Sound Money”:
“It is true that there were bitter disputes over particular policies during the founding era, such as the paying of the national debt, the existence of a national bank, and whether to subsidize domestic manufactures, and these differences seemed tremendously important in the 1790s. But in spite of these quarrels, there was a background consensus on both principles and the main lines of economic policy that government should follow.”
According to data from the U.S. Treasury itself, on Jan. 1, 1791, during George Washington’s second year as president, the national debt was $75 million, but that financial liability was incurred during the Revolutionary War as the cash-strapped Continental Congress, which lacked authority to levy taxes, accepted loans from France’s government, the Spanish government, Dutch bankers and investors, etc.
And it was also true that Washington accrued $7 million more in debt during his entire eight years as president, but, with the genius help of Secretary of the Treasury Alexander Hamilton, they firmly established our flailing country on solid financial grounds and as a global power.
Moreover, in 1795, they absolved U.S. financial or debt obligations to foreign governments (though it did owe to some private investors in Europe) because American bankers privately assumed the foreign debts at a slightly higher interest rate and then resold them at a profit on domestic U.S. markets.
The second U.S. president, John Adams, essentially broke even with the national debt during his four years in office by starting his term $82 million in the red, dropping the debt $4 million in two years to $78 million, then accruing back the same amount by the end of his term in 1801, largely in order to fund a larger, more mobile Army. Nevertheless, Adams cautioned against national loans, saying they led to the collapse of many historical empires.
Thomas Jefferson was head and tail above the presidential pack when it came to federal spending and reducing the national debt. Despite fighting in the Barbary Wars and obtaining low-interest loans for the Louisiana Purchase in 1803, during his eight years in office Jefferson lowered the national debt from $83 million to $57 million.
And the next four presidents basically followed suit. Despite the war of 1812, further U.S. land acquisitions and the building up of inter-state infrastructure, etc., the next four administrations of Presidents Madison, Monroe, Quincy Adams and Andrew Jackson were able to bring the national debt down from $57 million to a mere $33,703.05 cents, and then to $0!
You ask: How did our founding presidents do it?
Here’s a snapshot of their sentiments and policies toward national debt, which are further detailed in the third chapter (“Stop the Nightmare of Debt”) in my book, “Black Belt Patriotism: How to Reawaken America.”
George Washington told the House of Representatives in 1793: “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 the time more valuable,” as Time magazine reported.
Washington also wrote in 1799 to James Welch, “To contract new debts is not the way to pay for old ones.”
John Adams wrote to Thomas Jefferson from Paris in 1780: “I think we shall do no great things in borrowing [money], unless that system or some other, calculated to bring things to some certain and steady standard, succeeds.”
Jefferson similarly admonished Samuel Kercheval in 1816, “To preserve [the] independence [of the people], we must not let our rulers load us with perpetual debt.”
Thomas Jefferson also wrote to Fulwar Skipwith in 1787, “The maxim of buying nothing but what we had money in our pockets to pay for … [is] a maxim, which, of all others, lays the broadest foundation for happiness.”
In spite that the national deficit nearly doubled under President James Madison, largely due to the War of 1812, the so-called “Father of the Constitution” said in remorse: “I regret, as much as any member, the unavoidable weight and duration of the burdens to be imposed; having never been a proselyte to the doctrine, that public debts are public benefits. I consider them, on the contrary, as evils which ought to be removed as fast as honor and justice will permit.” He described national debts as “moral obligations” as far back in Federalist Paper No. 43.
President Monroe, who shrank the national debt by one-third, said, “The vast amount of vacant lands, the value of which daily augments, forms an additional resource of great extent and duration. These resources, besides accomplishing every other necessary purpose, put it completely in the power of the United States to discharge the national debt at an early period.”
John Quincy Adams, who also shrank the national debt by another one-third said, “The plain state of the fact appears to me to be that the load of taxation to pay the interest on the national debt is greater than the nation can bear, and that the only possible remedy will be a composition with the public creditors, or an authoritative reduction of the debt in one form or another.”
Andrew Jackson made this passionate presidential commitment: “I stand committed before the country to pay off the national debt at the earliest practicable moment. This pledge I am determined to redeem.” (And on Jan. 8, 1835, the national debt was paid off!)
Compare all those frugal fiscal founders’ financial principles to the fact that President Biden’s 2023 federal budget will “nearly double nominal debt, growing from $24.6 trillion to $43.6 trillion over the next decade,” according to the watchdog Committee for a Responsible Federal Budget.
The CBO even reported, “Debt held by the public is projected to rise in relation to the size of the economy each year, reaching 118 percent of GDP by 2033 – which would be the highest level ever recorded.”
Am I missing something? Do you think your household could withstand doubling your spending, debt and deficits, without the house of cards eventually crashing in a gargantuan way?
To add insult to injury, our vassalage to other countries deepens as they bankroll increasing amounts of U.S. debt. In 1970, only 5% of U.S. public debt was foreign owned. Fifty years later, foreign owners now own nearly one-third of our national debt!
The Peter G. Peterson Foundation explained, “Foreign ownership of U.S. debt, which includes both governments and private investors, is much higher now than it was 50 years ago. In 1970, total foreign holdings accounted for $4.9 billion, or just 5 percent, of DHBP. As of December 2021, such holdings made up $7.7 trillion, or one-third, of public debt. Of that amount, 54 percent was held by foreign governments while private investors held the remaining 46 percent. Because Treasury securities are backed by the full faith and credit of the U.S. government, creditors including foreign investors often view lending to the United States as a safe investment.”
Do you really want four more years of a Biden presidency that literally hands more American soil over to foreign ownership? Can the America economy afford four more years of Bidenomics without utterly collapsing in on itself?
John Adams was right: “Facts are stubborn things.”
This article was originally published by the WND News Center.
This post originally appeared on WND News Center.