Wednesday, January 30, 2013
Debts we have none: and whatever we may contract on this account will serve as a glorious memento of our virtue. Can we but leave posterity with a settled form of government, an independent constitution of its own, the purchase at any price will be cheap...
No nation ought to be without a debt. A national debt is a national bond...as a compensation for [Britain's] debt, she has a large navy; America is without a debt, and without a navy...
Indeed debt is not inherently bad and, as Hamilton noted, really necessary much of the time. Mortgages help people buy homes, and even inflationary systems like credit cards do allow people to acquire necessary items when cash isn't available immediately.
I know now from personal experience that at the municipal level it's our lifeblood. The Town doesn't have a continuous source of revenue, so from time to time we need to rely on our credit line to meet obligations that are continuous (salaries for our handful of employees, road and equipment maintenance, heat and lights, etc).
State Treasurer Beth Pearce has done an excellent job making sure Vermont retains a stellar credit rating so it can do similar things on a scale several orders of magnitude more complex. And the Feds, of course, infinitely beyond that.
Certainly unmanageable debt is a problem, particularly if you aren't a national government with its own currency and the ability to print money. But since the beginning of our republic, debt has been a public good, and people need to keep that in perspective.
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