US financial problems similar to Jefferson’s debt

In our decisive indecisiveness about deficits and debt, “we the people” of this debt-ridden country are channeling the commercial spirit of perhaps the most debt-ridden of all our Founding Fathers, Thomas Jefferson. As in so many of our manifold national contradictions, we continue to echo the conflicting sentiments of the author of our Declaration of Independence.

Like many of us, Jefferson abhorred debt, but he could never get out of it. And, like many of us, he was appalled by the crass spectacle of commercial capitalism, but he could never resist the lure of the emporium or the temptation of a tantalizing sale.

Thomas Jefferson was a shopaholic. 

As historian David McCullough has put it, Jefferson was “an irrepressible shopper.” He was “a chronic acquirer…not known to have ever denied himself anything he wished in the way of material possessions or comforts.” French wine. French shirts with lace cuffs. Fancy furnishings. Sculptures, paintings, and other fine works of art. And books, books and more books. Jefferson bought two thousand books during his diplomatic years in Paris alone. (“I cannot live without my books,” he admitted, famously, to the frugal John Adams.)

Like so many of us today, Jefferson was one American who was always more than willing to buy now and pay later to improve his standard of living. Had there been such a thing as a credit card in his day, he would have struggled like so many of us do to pay the minimum every month. And yet his lifelong thunderings against the inherent evils of debt could easily be mistaken for eloquent excerpts from the latest press release of the Tea Party.

“There does not exist an engine so corruptive of the government and so demoralizing of the nation as a public debt,” he wrote. “It will bring us more ruin at home than all the enemies from abroad…” Jefferson believed that no generation has the right to burden future generations, and so every generation should pay off the entirety of its own debt. “The earth,” he explained, “belongs to the living.”

Some of these sentiments will no doubt be quoted favorably by fervent Republican backbenchers during the upcoming Congressional deliberations on raising the national debt ceiling. And rightly so. The nonpartisan Congressional Budget Office projects that in 2020 the federal budget deficit will be $1.254 trillion. Three-quarters of that projected deficit bill for U.S. taxpayers — the tidy sum of $916 billion — will be for interest payments alone on the national debt. Unless we act soon, America’s accumulating burden of debt will become unsustainable.

Jefferson had his excuses, of course, for his own debt. He inherited debt. He was a planter and agriculture necessarily depends on debt to finance planting secured by the next harvest. He assumed the debt of a friend who died. Jefferson’s debt did not all result from his mania for shopping. And, like Jefferson, we have some good excuses, too, for our debt, both as individuals and as a nation.

Jefferson’s agrarian notions of republican virtue (with a little “r”) have long since yielded in America to the mundane practicalities of democratic capitalism (with a little “d”) advanced by his political and philosophical rival, Alexander Hamilton. Debt can be necessary. Debt can be useful. Both privately and publicly, we Americans cannot do without the option of debt. The kids do need to go to college, and the country does need new schools and new infrastructure. 

The problem with debt, the problem with buying now and paying later, is the same today as it was at our founding: later always comes.

When later came for Jefferson in his old age, and when his mountain of debt threatened at last to become an avalanche, the Congress of the United States tried to bail him out. The British had burned the Library of Congress during the War of 1812, and, for four dollars a volume, Jefferson sold his country his thousands of books to replace it. 

Jefferson then went out immediately and began to pile up more debt by buying still more books. Ultimately, he died in debt, and his heirs had to sell his beloved home Monticello, for a fraction of its cost, to help pay off his creditors. The Congress failed to save him from financial ruin.

As we eye with Jeffersonian ambivalence the approaching avalanche of our own debt, it is far from certain that our Congress today will succeed in saving us from the same fate.

James Bacchus is a former Member of Congress, and a former chief judge of the World Trade Organization.  He chairs the global practice of the Greenberg Traurig law firm.