In threatening to prevent an increase in the nation's debt ceiling, congressional Republicans have argued that they are upholding traditional principles of fiscal conservatism. According to some, the United States' debt burden is unsustainable, and only by prohibiting the Treasury Department from greater borrowing will the government be forced to live within its means. Members of the Tea Party movement have pushed these views by implying that any legislator who votes for an increase in the debt ceiling will be violating the spirit of the founding fathers.
Nothing could be further from the truth.
Far from being a contemporary phenomenon, debates over the national debt have been around since the nation's birth. The most well-known of these took place between Thomas Jefferson, the U.S.' third President, and Alexander Hamilton, the country's first Treasury Secretary. Jefferson famously opposed federal borrowing on the grounds that it placed an undemocratic burden on future generations. Hamilton, by contrast, felt that borrowing was necessary for the young republic to fund its growth. While Hamilton's arguments prevailed, this dispute set the terms for long-running debates over the size and role of government.
But whether they thought that the national debt was a blessing or a curse, the founding fathers were united in the belief that the government was obligated to repay money that it had already borrowed -- which is the key issue at stake when it comes to raising the debt ceiling. Although largely forgotten today, one of George Washington's first acts as President was to have the federal government assume the debts that the states had incurred in the Revolutionary War. Washington understood that nations were only as strong as their public finances, and as President he made sure that the federal government did everything in its power to maintain the country's creditworthiness. This included raising revenues, which at the time came mainly from tariffs on imported goods and taxes on consumer items such as whiskey. Debt repayment was also enshrined in the Constitution. As Thomas Geoghegan has recently pointed out, Articles I and V prohibit the government from impairing the obligation of contracts and from seizing private property without compensation, as would be the case in the event of a default on the national debt. And the 14th Amendment, which was passed in the aftermath of the Civil War, prevents the government from even questioning the "validity of the public debt."
A belief in the sanctity of government obligations has served the United States well throughout its history. Unlike many other countries, the U.S. has never defaulted on its debt, and while previous increases in the debt ceiling have been controversial Congress has always upheld its responsibility to maintain the nation's borrowing power. This record of fiscal rectitude has helped make treasury bonds the world's safest financial asset, and this, in turn, has enabled the U.S. to borrow more cheaply than other nations. While a case can be made that low interest rates have allowed the country to run up record levels of debt, the reality is that the United States has long benefited from its privileged position in world credit markets.
As such, a failure to increase the debt ceiling would not only threaten the basis for American power but represent a fundamental shift in the nation's history. For while congressional Republicans and their Tea Party backers would have us believe that opposing the debt ceiling increase will prevent the government from future irresponsibility, the truth is that the debt ceiling increase is needed to allow the government to repay debts that it has already incurred. It is this potential for political shortsightedness, more than the actual size of the deficit, that has agencies like Standard & Poor's concerned about U.S. creditworthiness. If Republicans are really worried about the country's fiscal health, they should renounce the radical proposals of the Tea Party and work with Democrats to craft a budget plan that recognizes the need for balanced spending cuts and tax increases over the coming years. Failure to do so would be the very opposite of conservatism.