Last week the Federal Reserve cut the interest rate yet again in hopes of easing the strain in the credit markets and jumpstarting the economy. The government is also doling out billions to taxpayers through economic stimulus checks, coming soon to a home near you. What both of these stimuli hope to gain is your money. In other words, the feds hope you'll start spending again – real soon!
Can we offer nothing more to fix our economy than the enticement for Americans to spend more? Are we so captivated by consumerism that we can't see when our own government dangles financial carrots in front of us? How many of us actually consider saving the stimulus money we're sent, paying down our personal debt or, most radical of all, sending it back to the government with a note, "Bounced for insufficient funds"?
I'm not saying I'm against the stimulus package. I just wonder if we are stimulating the economy or feeding America's financial frenzy and disarray. Isn't cutting our expenses an equally viable stimulus? Why is it so many oppose big government solutions, until they give us back money?
I'm not an economist. But this much I have figured out: If our spending is always more than our income, we're heading down the wrong fiscal road. That's where we've been for quite some time. Outside of brief periods in our nation's history, we've never been very disciplined with debt management.
On Jan. 1, 1791, during George Washington's second year as president, the national debt was $75,463,476.52. On Sept. 30, 2007, the government estimated the balance owed at $9,007,653,372,262.48. The nonprofit, nonpartisan Institute for Truth in Accounting calculates the actual national deficit to be much closer to a staggering 56 trillion dollars. Our annual trade deficit is a staggering $800 billion, from $38 billion in 1993. That's $90 billion with Mexico and $250 billion with China.
At even $9 trillion, we the people could satisfy our national debt if we require every American to pay roughly $184,000 each. Of course, that's not going to happen, especially since the average American is almost in the same chronic income-debt ratio rut as the federal government.
According to the Federal Reserve, the total U.S. consumer (installment) debt reached $2.46 trillion in June 2007, up from $2.398 trillion at the end of 2006. Credit cards account for roughly $850 billion of that total amount. Credit card companies are the Godzillas of greed, using deceptive methods of control and abuse that rival any slave trafficking scheme, with their:
- Bigger incentives to order cards
- Progressive interest rates, starting with no-cost introductory balance transfers
- Disappearing grace periods
- Interest rates as high as 29 percent
- Lowering principal payments from 5 percent to 2 percent
- Higher late payment fees
- Over-limit spending fees
- Double-cycling billing
- Hidden phone charges to talk to representatives
- Hidden charges for making payments by phone
- Even hidden billing charges to pay off or close your account!
Credit card company corruption has become so prevalent that feds had to intervene last week to prevent potential fraud. The Office of Thrift Supervision, which oversees the nation's savings and loans, "endorsed a seven-point plan to tackle 'unfair' and 'deceptive' practices by companies that issue credit cards." But is the government coming to save the day, or is it merely asking credit card companies to be more lenient with debt clients to extend vassal relations?
In any form, debt is a form of repression. Debt is bondage, plain and simple. In fact, the U.S. Department of State got it right when it reported that debt bondage has one primary goal: "… to keep a person in subjugation." For more than 200 years, we the people have proven as a nation that we know how to dig ourselves quite successfully into a bottomless financial hole and perpetuate our subjugation to debt.
Our founders created this country to experience freedom from tyranny and domination. Do we think we can experience liberty, politically and personally, when our private and national debts loom over us like the king of England once did?
Though the Revolutionary War took its toll upon the financial status of the nation (as wars always do), most ardent patriots didn't want to see the country accrue any further arrears. Shedding representative light on that fiscal responsibility was Thomas Jefferson, who had quite a bit of financial advice to offer the new nation. Here are a few of his pearls of wisdom:
-
… the maxim of buying nothing but what we had money in our pockets to pay for; a maxim which, of all others, lays the broadest foundation for happiness.
– Thomas Jefferson to Fulwar Skipwith, 1787
We must make our election between economy and liberty, or profusion and servitude. If we run into such debts as that we must be taxed in our meat and in our drink, in our necessaries and our comforts, in our labors and our amusements, for our callings and our creeds, as the people of England are, our people, like them, must come to labor sixteen hours in the twenty-four, give the earnings of fifteen of these to the government for their debts and daily expenses, and the sixteenth being insufficient to afford us bread, we must live, as they now do, on oatmeal and potatoes, have no time to think, no means of calling the mismanagers to account, but be glad to obtain subsistence by hiring ourselves to rivet their chains on the necks of our fellow-sufferers.
– Thomas Jefferson to Samuel Kercheval, 1816
It is incumbent on every generation to pay its own debts as it goes. A principle which if acted on would save one-half the wars of the world.
– Thomas Jefferson to A. L. C. Destutt de Tracy, 1820
So did Jefferson accept his own advice? Yes and no.
Jefferson and his contemporaries did in fact apply some wise fiscal principles to the running of the national government. For the record, Jefferson's administration witnessed the reduction of the national deficit during his eight-year tenure in office (1801-1809), from roughly $83,038,050.80 to $57,023,192.09, despite America's war with the Barbary States during the same period.
Sad to say, however, that Jefferson's own personal life ended up in quite the financial shambles, owing more than $100,000 when he died.
In the end, I guess he really was American after all.
(Chuck's column now runs in syndication through Creators Syndicate. Subscriptions can be obtained by contacting Creators Syndicate. To check out some of his non-political articles, see Chuck's WND archives.)