The debate over raising the debt ceiling continuously brings up the threat that not doing so would jeopardize the “full faith and credit of the United States”. Exactly what is the full faith and credit of the United States? It might help in the discussion if we stopped for a moment and thought about what the expression actually means.
“Full faith and credit of the United States” is referring to the confidence lenders have in the ability of the federal government to confiscate enough of the earnings of the American people in time to pay off its debts when they come due. The federal government itself earns nothing. Every penny spent by any government must first be earned through the physical and intellectual labor of its citizens. The government then confiscates a part of those earnings and uses it to pay for the products and services it purchases.
Once the amount of spending exceeds the amount of confiscated earnings, in order to continue spending the government must borrow against the future earning of it citizens. At present: July 13, 2011, some forty percent of the average person’s earnings are taken by federal, states and local governments in order to support their prolific spending habits. Thomas Jefferson warned us in 1813 “never to borrow a dollar without laying a tax in the same instant for paying the interest annually, and the principal within a given term; and to consider that tax as pledged to the creditors on the public faith.” That is still good advice today.
The problem is that our politicians do not have the political courage to follow Jefferson’s advice. They know that attempting to do so would result in their being thrown out of office at the earliest possible opportunity. To put it in perspective, the total paid by the average American today is somewhere between forty and sixty percent of their income, including all taxes paid at the federal, state and local level. (exact figures are hard to come by) That means when we go to work each week, all the money we earn on Monday and Tuesday goes to a government body in taxes — government always gets its money first. It is not until Wednesday or Thursday that we begin to earn money we can use for our own personal consumption.
If we followed Jefferson’s advice today the government would need to confiscate all our earning in taxes and still it would not have enough to pay off the debt. Of course, it cannot do that and survive, therefore, they need to keep raising the debt limit and passing the debt on to future generations. It is time to force the federal government to “live within its means”. As it is, we have already condemned our children and grandchildren to a life of servitude to the state. To allow the federal government to continue to borrow against the earning of future generations is unconscionable and should not be allowed.
That is exactly what congressional Republicans will be doing if they make any type of deal with the progressives (American socialist) currently running the federal government to raise the debt limit. It’s time to cut up the nation’s credit card.