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Wednesday, November 30, 2016

Washington's Farewell Address: Taxes and Debt

From The Founders, Religion and Government:

Washington's Farewell Address
Part Eight of 13
Taxes and Debt

Considering that Washington’s Farewell Address was penned by Alexander Hamilton, one would have to expect a section on finance. Here Hamilton was an expert, but here Washington was experienced. He understood the difficulties that could face a nation due to financial problems. As Commander in Chief of the Continental Army he saw how close we came to losing the war because there were no funds to pay for needed military supplies. And as a Virginia planter Washington was aware of the trap created by debt. This he did not want to see his country fall into.

Printed in Philadelphia’s American Daily Advertiser on September 19, 1796:

“As a very important source of strength and security, cherish public credit. One method of preserving it is to use it as sparingly as possible, avoiding occasions of expense by cultivating peace, but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it, avoiding likewise the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear. The execution of these maxims belongs to your representatives, but it is necessary that public opinion should co-operate. To facilitate to them the performance of their duty, it is essential that you should practically bear in mind that towards the payment of debts there must be revenue; that to have revenue there must be taxes; that no taxes can be devised which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment, inseparable from the selection of the proper objects (which is always a choice of difficulties), ought to be a decisive motive for a candid construction of the conduct of the government in making it, and for a spirit of acquiescence in the measures for obtaining revenue, which the public exigencies may at any time dictate.”

We have not used our debt sparingly. The last time the debt went down was 1951. In recent years the debt has skyrocketed. We should have listened. 

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