In the eyes of Thomas Jefferson, observes Marco Bassani, “the greatest danger came from the possibility of legislators plunging citizens into debt.” Bassani, a professor of history and political theory at the university of Milan, Italy (and a Facebook friend), has written perhaps the best book on “the political theory of Thomas Jefferson.”
“We must not let our rulers load us with perpetual debt. We must make our election between economy and liberty, or profusion and servitude,” quotes Bassani in Liberty, State & Union. The “fore horse” for oppression and despotism is public debt [which is better relabeled government debt]. “Taxation follows that, and in its train wretchedness and oppression” (p. 106).
If only the high-minded Jefferson, author of the Declaration of Independence, had written the Constitution with crooks in mind.
UPDATE I (April 18): What took them so long? Standard & Poor’s has cut the American credit outlook to negative, reports Bloomberg.com:
“S&P assigned a one-in-three chance it will lower the U.S. rating in the next two years, saying the credit crisis and recession that began in 2008 worsened a deterioration in public finances. Budget differences among Democrats and Republicans remain wide and it may take until after the 2012 elections to get a proposal that addresses the concern, S&P said.”
And that’s not the half of it.
Despite the skewed reporting on the move, even the New York Times recognized that what the following sources say must be included in their report, today:
“The idea that the U.S. public finances are on an unsustainable trajectory is hardly new news,” economists from Capital Economics said in a research note. “Indeed, we warned that the U.S. might be downgraded, or at least put on negative watch, as far back as nearly two years ago.”
What has “You-Can’t Fix Stupid” got to say for himself? He blames partisanship, of course, for the S & P’s belated reality check—but then responds to the economic reality reflected in the S&P’s downgrade with … a wave of his magic political wand:
For their part, administration officials played down the revision while reiterating Washington’s determination to act. Treasury officials “believe S.&P.’s negative outlook underestimates the ability of America’s leaders to come together to address the difficult fiscal challenges facing the nation,” an assistant secretary for financial markets, Mary J. Miller, said in a statement.
President Obama has initiated a bipartisan process that will help make progress on restoring fiscal responsibility, the statement said.
“I think this is fundamentally S.&.P’s making a political judgment,” said Austan Goolsbee, chairman of President Obama’s Council of Economic Advisers, in an interview with Bloomberg TV news, pointed out that President Obama in a recent speech had said that there would be actions taken to promote fiscal responsibility. “I don’t think that the S&P’s political judgment is right.”
UPDATE II: I.DING THE CORPSE. The S&P’s “special talent is to arrive at the morgue and predict the demise of the deceased,” writes the Financial Post’s Terence Corcoran.
The United States has already forfeited its role as the economic leader of the world. Under the Obama administration’s program of rising debt, soak-the-rich tax policies, spending expansions and regulatory overkill, America is already establishing itself as a fiscal and economic mediocrity.