Tag Archives: Surplus
I consider the fortunes of our republic as depending, in an eminent degree, on the extinguishment of the public debt, before we engage in any war. because, that done, we shall have revenue enough to improve our country in peace, & defend it in war, without recurring either to new1 taxes or loans, but if the debt shall2 once more be swelled to a formidable size, it’s entire discharge will be despaired of, and we shall be committed to the English career of debt, corruption & rottenness, closing with revolution.
To Albert Gallatin, October 11, 1809
Patrick Lee’s Explanation
Far-sighted leaders know growing debt is a ticking time bomb.
Swiss-born Gallatin (1761-1849) was Jefferson’s Secretary of the Treasury for eight years, and he was filling the same role for President Madison. Jefferson had utmost confidence in Gallatin’s skill, crediting him with bringing the nation’s indecipherable financing from opaque under Presidents Washington and Adams to transparent in his administration.
The former President thought America would stand or fall according to its national debt. If it were paid off, the resulting surplus could be used for internal improvements in peace time or defense if war came, without more borrowing or increased taxes. However, if the debt were allowed to grow to the point where paying it off was impossible, we would become like the British. There, perpetual debt led to “corruption & rottenness,” and the inevitable result would be “revolution.”
Curiously, Jefferson didn’t apply the same rigor to his own finances. His personal debt grew throughout his life to the point where it was unmanageable.