George Washington’s Farewell Address – Public Finances

“As a very important source of strength and security cherish public credit…use it as sparingly as possible; avoiding occasions of expense by cultivating peace but remembering also that timely disbursements to prepare for danger frequently prevent much greater disbursements to repel it.”

Continuing my review of Washington’s Farewell address, we come to his short discussion of public finances.  Only one paragraph in length, our first President offers advice that is quite pertinent for today’s politicians regarding spending by the federal government.

Interestingly, Washington links the country’s finances to “strength and security.”  The implication of this is that a pauper nation is neither strong nor secure.  Washington appears to echo Benjamin Franklin’s sentiment:

“[t]hink what you do when you run into debt, you give to another power over your liberty.”

Both men stress the effect spending has, whether on a nation or an individual.  When a nation allows its debt to reach the proportions Americans now see, that nation becomes a servant of its creditors.  More insidiously, these debt levels enslave citizens to their government inverting the nature of the relationship between citizen and government.

Washington also counsels prudent spending for national defense, arguing that some spending for defense is necessary and proper as a deterrent to war that would, ultimately, be far more costly.

In addition to spending, Washington briefly touches on the topic of taxation:

“[t]owards the payment of debts there must be Revenue; that to have Revenue there must be taxes; that no taxes can be devised, which are not more or less inconvenient and unpleasant; that the intrinsic embarrassment, inseparable from the selection of the proper objects…ought to be a decisive motive for a candid construction of the conduct of the government in making it, and for a spirit of acquiescence in the measures for obtaining revenue, which the public exigencies may at any time dictate.”

To begin his comments, Washington reminds us that in order to perform even minimal functions, the government must collect taxes; however, he also acknowledges the inconvenience and unpleasantness of all taxes and recommends choosing forms of taxation that are the least intrusive.  Finally, Washington emphasizes that one way to make taxation more palatable to the citizenry is to ensure that government activities and expenditures are transparent to the public.

I’ll conclude this entry with a few rhetorical questions.  Given current government expenditure levels, can we honestly say that the federal government is spending prudently?  Deficits in the last several years have exceeded $1 Trillion, with spending at approximately $3.5 Trillion and yet the United States Senate has not passed a budget in over 3 years.  Are taxes simple and minimally intrusive?  As of 2011, the US tax code, according to Reason.com, runs 72,536 pages.  Are government activities transparent to the public?  Given the recent revelations involving Operation Fast and Furious, it’s difficult to argue that much of anything currently done by government is transparent.  Finally, what is the toll that is being taken on the younger generations (which include myself) for this profligacy?

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Published in: on June 26, 2012 at 2:00 pm  Leave a Comment  

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