Debt Limit Debate is as Old as the Country

These two just won’t stop fighting.

Over two hundred years since Hamilton got himself killed, I can hear Jefferson and Hamilton continue to fight via the words and arguments being tossed out over the debt limit. Mostly I hear Jefferson coming from the camp that is contemplating whether or not it would be a “big deal” if we ran up to the limit. Answer: Yes, it would be terrible.

I am horrified by the casualness with which they toss around the word default, and I am even more horrified by the insane idea that hitting the debt limit might have small or limited consequences. This is the Jefferson argument.

Jefferson was always in personal debt (so he blamed it on the bankers rather than himself). Jefferson thought it would be okay for future generations to default on past generation’s debt. He thought a revolution every 20 years would be healthy. Do you really want to go into the streets and fight a revolution every 20 years? People have a hard enough time dealing with a stock market crash every 20 years. If I wanted someone to argue for free speech or freedom of religion (something ideologically pure), I’ll take Jefferson. If it has anything to do with money, business or realistic administration of a country, get Jefferson and his ideas as far away as possible.

Hypocrisy was critical for Jefferson. In order to get things done in a real world, it required him to be a hypocrite. Sound at all like those who are charging toward the debt limit today? Let’s run right up to the limit based on ideological principals, but back off at the last second and ask for hypocritical concessions at the 11th hour.

Hamilton may not have been as ideologically eloquent, but that is because he was a realist from the out-start of these issues. He would be appalled with the way current politicians are discussing the country’s credit like a child that just found his dad’s gun.

I beg the politicians – please don’t let your Jeffersonian ideals guide your thinking when it comes to the financial business of the country. Remember that Jefferson would usually break with his ideals when it was really necessary. Ask yourself what Alexander Hamilton would have done. Get in touch with your Federalist side. When it comes to these issues, Hamilton was almost always right and Jefferson was almost always wrong.

One last thing. If we do hit the debt limit, then I say the compromise of 1790 goes out the window and we move the US Capitol back to New York or Philadelphia.

Pictures from University of Washington Law School and White House Historical Association