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Tuesday, March 2, 2010

The Curse Of Debt, Part 1

Although not forbidden in the Law of God, debt incurs extremely undesirable consequences.
One of the blessings listed in Deuteronomy 28 to those who keep God's law is that "You will lend to many nations but will borrow from none." (v12)
I believe that the reverse is also true.
History shows that those who break God's law, borrow from many nations and lend to none.
Take America for example.

From the beginning of our nation's history, we were in a huge debt because of the war with Britain. Because of the debt-financed spending of Alexander Hamilton, by Thomas Jefferson's election, America was in debt $83 million. Small government believer Jefferson had whittled that amount down to $57 million by 1807. Jefferson believed that the government could borrow in order to finance a defensive war, but only if the current generation was taxed to pay off the debt.
Because of the war of 1812, the debt shot up to $127 million. By 1830, the Monroe- John Quincy Adams administration had reduced that amount back to $58 million. Jeffersonian President Andrew Jackson payed off the last treasury bond in 1835.
The United States was debt free.
But because of the Panic of 1837, the debt was $16 million by 1845. President Polk then decided to start a war with Mexico in order to acquire California, driving the debt up to $63 million by 1848. Democrat President Franklin Pierce reduced the debt down to $28 million during his administration. The next big hike came during the administration of none other than Father Abraham (Lincoln), who proceeded to explode the national debt up to $2.8 billion. However, the principles of personal responsibility were not completely snuffed out of the American people. Grover Cleveland, who vetoed over 400 spending bills (more than all his predecessors combined) whittled the debt down to $1.2 billion by the early 1900s. Woodrow Wilson, one of the most Hamiltonian presidents in our history, increased the debt to $26 billion. Future administrations increased it modestly, until FDR increased it to $260 billion by 1945. This deficit spending helped increase the impact of the Great Depression on our economy. The last time the national debt actually declined was 1960.
Today, it's over $12.5 trillion.

(above information taken from Hamilton's Curse, by Thomas Dilorenzo)

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2 Comments:

Blogger Johann said...

Great post, Stephen. I have read Hamilton's Curse. This is a great topic, and I really like your Biblical spin at the beginning. I'm looking forward to the next part! BTW, you may be interested in some of Prof. DiLorenzo's articles at the Mises Institute:http://mises.org/articles.aspx?AuthorId=425
~Johann Van De Leeuw

March 3, 2010 at 4:51 PM  
Blogger Stephen said...

Thanks!

March 4, 2010 at 2:48 PM  

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