It seems only fitting that the liberty principle for this Freedom Friday should be economic freedom - particularly the importance of avoiding debt. The United States lost its sterling credit rating last week when Standard and Poor's downgraded America's debt from AAA to AA+. This downgrade came as a result of our leaders' inability/unwillingness to reduce our nation's debt.
President Barack Obama and his cohorts are either uneducated as to the effect of debt on individuals, families, states and nations - or they are using our nation's debt to advance their own agenda. Debt is a form of "involuntary servitude," and it can enslave us as surely as conquest by military means.
W. Cleon Skousen defined debt as "simply borrowing against the future. It exchanges a present advantage for a future obligation. It will require not only the return of the original advance of funds, but a substantial compensation to the creditor for the use of his money" (The Five Thousand Year Leap: 28 Great Ideas That Changed the World, p. 205).
Skousen explained that the Founders understood that the ability to borrow funds in a time of crisis is "an honorable procedure" and "looked upon it as a temporary handicap which should be alleviated at the earliest possible moment. They had undergone sufficient experience with debt to see its corrosive and debilitating effect, which tends to corrupt both individuals and nations."
Our leaders over the past one hundred years have been much different than our Founding Fathers. Our Founders abhorred debt and considered it to be "like a plague." They considered "excessive indebtedness as a form of cultural disease." If our modern-day leaders had followed the example set forth by our Founders, our nation would not be more than $14 trillion in debt today, and we would not have lost our best in the class credit rating.
Our Founders understood that the debts of a nation are no different than the debts of individuals. The fact that the responsibility for debt is shared by many does not make debt any less dangerous. The ability to borrow from friends - not enemies - at a time of crisis is good. Wars and other emergencies are expensive and often require debt. Our Founders understood this situation and authorized debt for emergencies when writing the United States Constitution; however, "they considered it a matter of supreme importance for the survival of a free people to get out of debt and enjoy complete solvency in order to prosper." (Above quotes are from Leap, pp. 205-214.)
JD Foster of The Heritage Foundation explained what the credit downgrade really means to us: "A credit rating downgrade will eventually mean higher interest rates on U.S. government debt. This may be hard to imagine given the recent drop in Treasury bond rates in response to events overseas. . But higher future rates are certain, and that means that even more federal tax dollars must be dedicated to paying the interest on past government excesses. Higher interest rates and interest cost means greater deficit pressures, which can mean more debt, which can lead to higher interest rates. This is why it is termed a debt spiral."
Foster continued with his explanation: "While not solely to blame, President Obama and his allies are most certainly preeminently to blame. Facing a rapidly growing budget deficit in 2009, President Obama pushed through a massive fiscal stimulus program followed by a succession of lesser efforts. As the anemic state of the economy attests quite clearly, those programs failed miserably - except in raising federal spending and national debt.
"Then the President pushed through his disastrous and highly unpopular health care reform. On paper, these reforms give the appearance of improving the fiscal picture modestly. But as the Medicare trustees' report has reminded us every year after ObamaCare passage, this happy picture is an illusion. Aside from the damage it has done and will do to health care costs and services, from a fiscal perspective, Obamacare ultimately is just yet another unaffordable entitlement piled on top of those already on the books."
We must cap our spending, cut our entitlement programs and shrink our government. We simply cannot pay our debts by raising taxes, even by raising the taxes of the wealthy people in our nation. Even the wealthy do not have enough money to pay our nations debts. The only way we can get out of debt - or even get our good credit rating back - is to cut the spending. Cut, Cap and Balance was a good plan, much better than what we got.
I believe that there is only one way to pay our debts and live in economic freedom again. Our Founders set forth the way to conduct our government, and it worked for over a hundred years before progressives began to set up unaffordable entitlement programs that have led to our current debt situation. The only way that we can solve our fiscal problems is to return to the formula set forth by our Founders - the fundamental principles found in our Constitution. The Tea Party may be hated in our nation, but they know what we must do. They know that we are Taxed Enough Already (TEA) and are making their voices heard. This is a good time for all Americans to join the TEA Party!