On Presidents’ Day this year, let’s remember the remarkable commitment of our early presidents to building the financial integrity of the United States. George Washington set the tone. He knew that liberty, sound money, and balanced budgets were the keys to prosperity and national greatness.
In his “Farewell Address,” Washington urged Americans to avoid “the accumulation of debt, not only by shunning occasions of expense, but by vigorous exertion in time of peace to discharge the debts which unavoidable wars may have occasioned, not ungenerously throwing upon posterity the burden which we ourselves ought to bear.” In other words, let’s pay off all our debts from the Revolutionary War, and do it in our generation and not impose them on our children.
The next presidents agreed with Washington’s high caliber of statesmanship. Jefferson and Madison kept taxes low and still managed to whittle down the national debt. By the time of President Andrew Jackson, the U.S. paid off the whole debt, and began briefly running surpluses. As Jackson made clear, the new political issue was what to do with all the cash left over at the end of the year (Congress decided to give it back to the states, with the larger states getting the most).
Even presidents who struggled during their time in the White House kept their commitment to sound money and balanced budgets. Franklin Pierce, for example, waffled on the slavery issue, but he did muster the courage to veto a federal subsidy to the Collins Steamship Company, which was trying to win the nation’s shipping competition with taxpayer dollars, not good service. Even if we give Pierce a “D” on the slavery issue, we must give him an “A” on fiscal integrity. He is the only president in the last 160 years to cut the national debt in half during his presidency.
Shortly after Pierce, Abraham Lincoln proclaimed the natural rights of black Americans to life, liberty, and the pursuit of happiness. But the resulting Civil War, with its huge cost, challenged America’s finances as never before. Let’s commend Presidents Johnson, Grant, Hayes, Garfield, Arthur, Cleveland, and Harrison—seven consecutive presidents who had budget surpluses during each year of their presidencies. In doing so, they repaid almost two-thirds of the entire Civil War debt and restored sound money to our economy by redeeming all greenbacks (paper money issued during the Civil War) with gold. Most of that was accomplished without an income tax. Our citizens were frugal with federal dollars. Americans took care of Americans—they didn’t ask government to get involved.
What did it mean for the U.S. during its first century of existence to have presidents committed to liberty, sound money, and balanced budgets? First, the U.S. established a unique place in the world as a stable nation of people who did not cheat its citizens by inflating the currency or enacting expensive federal programs now and dumping the debt on future generations. We cared about honesty and fiscal strength in the long run. Second, because we proved our nation trustworthy, we attracted foreign investors, who helped supply capital to make our industries among the strongest in the world. Third, we attracted immigrants who wanted to live in a country that valued liberty and a sound dollar. Those immigrants, from Andrew Carnegie to Oscar Meyer, helped supply the talent that launched the U.S. into world economic leadership by 1900. Carnegie Steel, for example, dominated the world in steel production, and paved the way for American superiority in railroads, skyscrapers, and cars.
Sometimes our early presidents paid a price for their leadership. Grover Cleveland, for example, vetoed 414 bills during his first term—and was voted out of office when he ran for reelection. But the voters came to their senses after a term with Benjamin Harrison, who spent more than Cleveland in the hopes of winning votes. When Cleveland ran against Harrison a second time, Cleveland won and became the only president in U.S. history to serve two terms non-consecutively. He trusted Americans to support fiscal integrity in the longer run and he was right.
If we will teach our children the lesson that liberty, sound money, and balanced budgets mean stability, strength, and prosperity, perhaps we can raise up a generation who will demand those qualities that we had in past presidents be present in future presidents as well.