Wednesday, June 22, 2022

Debt and Credit

A City journal, advocating the passage of some sort of Loan or Treasury-Note Extension bill, naively remarks that it is "imperative that both parties in Congress should appreciate the importance of maintaining the Public Credit." Trite as this remark may seem, the course which our contemporary recommends does not appear to us to touch the root of the matter. The true way to maintain Public Credit is to evince a constant alacrity in extinguishing Public Debt. The Federal Finances are certainly this day in a worse plight by Forty Millions of Dollars than they were on the day of Mr. Buchannan's inauguration. That is, the Public Debt, on the 4th of March 1857, exceeded the cash in the Treasury by considerably less than Twenty Millions of Dollars; while the Public Debt of all sorts- including claims honestly due and payable- is now at least Seventy Millions, while the cash on hand is less than Ten Millions, and is likely to be nothing at all or thereabout at the close of the current month, or whenever the immediate payments under the new annual Appropriation bills shall have been made. In other words, the Tarriff and Mr. Buchannan's Administration have run the country in Debt at the rate of fully Ten Millions per annum. And the party unhappily in power insist that nothing shall be done, no step taken, toward the reduction of that debt. They give us no reason for believing that we shall do any better in the immediate future than in the immediate past, though they make a vague guess that we may, if the present Tarriff is maintained, begin to pay off our Debt some three or four years hence. That guess is directly in the teeth of all the facts bearing on the case.

We know there are time wherein Public Debt cannot be paid off- times of war, of pestilence, of general disaster by fire, frost, flood, or drouth, & etc. The rule, then, would seem imperative, that a Nation in debt should never allow a year of peace and thrift to pass without paying off some portion of that debt, or at least devising and adopting measures whereby a surplus of revenue to be devoted to such payment shall be speedily secured. And this is the only policy which can give to Public Credit the fullest moral support. Dexterity in manipulating public debt- skill in shifting debt from one shoulder to the other, so that it shall scarcely be felt- readiness to renew debts as they fall due- and all manner of ingenious devices of like nature- pale their ineffectual fires before the simple and solid method of increasing income or reducing outgoes so as to have a liberal surplus of revenue each year to be faithfully applied to paying off successive installments of the Public Debt. And this is the policy which the Republicans now urge and the Democrats persistently defeat.

Source (pg4 columns 3-4)

Sadly, today we no longer have a conservative political party.

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