01/1/09 - liberty-tree.ca by Thomas Jefferson (July 1816)
Thomas Jefferson was a US Founding Father. He drafted the Declaration of Independence and served as the 3rd US President.
[edited] We must not let our rulers load us with perpetual debt. We must choose between economy and liberty or profusion and servitude.If we run into such debt, that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our calling and our creeds, then we will have no time to think, and no means of calling our miss-managers to account. We would then be glad to obtain subsistence by hiring ourselves to rivet their chains onto the necks of our fellow-sufferers.
This is the tendency of all human governments. A departure from principle in one instance becomes a precedent for another, until the bulk of society is reduced to be mere automatons of misery. And, the fore-horse of this frightful team is public debt. Taxation follows that, and in its train wretchedness and oppression.
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2 comments :
One problem for the U.S. is that many foreigners invested their dollars in mortgage backed securities and government bonds.
More dollars have been leaving the U.S. to buy imports than returning to buy exports: the trade deficit. Some have collected overseas and used for trade in lieu debased currencies, while others have found their way back to the U.S. to invest (since this return of dollars does not represent the purchase of exports, it does not reduce the trade deficit). Everything seems okay: foreigners are using the dollars they receive for imports to invest in the U.S., that must be good, right?
It seems to me that many of these dollars were invested in mortgage backed securities and government bonds. For the economy as a whole these represent malinvestments, and therefore, are not good for the U.S. economy.
Ordinarily, a businessman might sell stocks and bonds to fund expansion, refurbish or update equipment, or whatever else. The idea is to use any money borrowed to increase future productivity. These are real investments in the future of an economy; they forego consumption today for more tomorrow. But it seems to me that many foreigners were investing in mortgage backed securities and government bonds. For the economy as a whole these represent malinvestments, and therefore, a burden.
Sure the investors get paid back by the government (so far), but how often is that money spent increasing future productivity? And the real cost is everything that private businesses could have achieved with the same resources.
Real investment has to compensate for the burden and waste of government debt to keep future output high. By "investing" the U.S. Government, foreigners have actually harmed the U.S. economy in the long run, by redirecting capital assets to wasteful government programs and away from real investment in the private sector.
Thoughts?
I appreciate your comment. I have responded with another post. See
Jefferson Warns about Debt: Discussion
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