Debt relief

“ Of course, some of the debt burden is responsive, so far as the annual charge is concerned, on that part of the floating debt which is reborrowed continually at rates of interest which follow current money rates, but, even so, the burden of capital repayment remains. An opportunity occurs for putting sections of the debt upon a lower annual charge basis whenever particular loans come to maturity, and there may be some considerable relief in the annual charge in the course of time by this method. ”

“ It pays down our national debt at a record rate. It sets aside nearly a trillion dollars in a contingency fund for future needs and emergencies. And we still have surplus money left over for broad, fair, responsible tax relief. ”

“ There is $1.7 trillion less debt held by the public today than was forecast in 1993. This has contributed to lower interest rates, record business investment, greater productivity growth, low inflation, low unemployment, and broad-based growth in real wages—and the first back-to-back budget surpluses in almost half a century. ”

“ The temporary loan obtained in the latter end of the year 1810 has also been reimbursed, and is not included in that amount.
The decrease of revenue arising from the situation of our commerce, and the extraordinary expenses which have and may become necessary, must be taken into view in making commensurate provisions for the ensuing year; and I recommend to your consideration the propriety of insuring a sufficiency of annual revenue at least to defray the ordinary expenses of Government, and to pay the interest on the public debt, including that on new loans which may be authorized. ”

“ If the National credit was to be maintained these sixteen hundred millions of floating obligations must be promptly placed on a basis that would give time to the Government to provide means for their ultimate redemption. President Johnson, in his message at the opening of the session, spoke of the debt not as a public blessing, but as a heavy burden on the industry of the country, to be discharged without unnecessary delay. ”

“ Sound policy demands that Government expenditures be reduced to the lowest amount which will permit the various services to operate efficiently and that Government receipts from taxes and salvage be maintained sufficiently high to provide for current requirements, including interest and sinking fund charges on the public debt, and at the same time retire the floating debt and part of the Victory Loan before maturity. ”

“ After meeting these national priorities, my budget pays down a record amount of national debt. We will pay off $2 trillion of debt over the next decade. That will be the largest debt reduction of any country, ever. Future generations shouldn't be forced to pay back money that we have borrowed. ”

“ And when, in the disturbance of credit and industry which followed, the twin heresies Expansion and Repudiation stalked abroad, Yankee ideas conquered again in the policy of our distinguished guest, the Secretary of the Treasury. So great a triumph has never been won by any financial officer of the government before, as in the funding of our national debt at four per cent., and the restoration of the national credit, giving an impulse to our prosperity and industry that can neither be stayed nor stopt. ”

“ Sir, I have always voteed for every measure for reducing the debt, since I have been in congress I wish it paid because it is a debt; an,so far, is a charge upon industry of the country and the finances of the government. ”

“ And he confidently believes that if he can be permitted to enforce this plan for a sufficient period of years, in the future, he will ultimately be able to save the people, annually, fifty cents each, on an average, in interest! and also continue to pay, annually, two dollars and a half for each person, on an average, of the principal, of the national debt! ”

“ Still, we have no cause to apprehend a depression comparable to that of the former period, or even to anticipate a deficiency which will intrench upon the ability to apply the annual $10 millions to the reduction of the debt. It is well for us, however, to be admonished of the necessity of abiding by the maxims of the most vigilant economy, and of resorting to all honorable and useful expedients for pursuing with steady and inflexible perseverance the total discharge of the debt. ”

“ Indeed, when we look at the progress which has been made towards the diminution of the debt, in years when the facilities of the government for meeting its liabilities were much less than at present, there can be no doubt that it will in the course of a few more years be extinguished altogether, and thus enable the government to carry out farther reductions, and promote many schemes of improvement. ”

“ The Government has derived great benefit from it in the progress thus far made in refunding the public debt at low rates of interest. An adherence to the wise and just policy of an exact observance of the public faith will enable the Government rapidly to reduce the burden of interest on the national debt to an amount exceeding $20,000,000 per annum, and effect an aggregate saving to the United States of more than $300,000,000 before the bonds can be fully paid. ”

“ Let it be under stood that no repudiator of one farthing of our public debt will be trusted in public place, and it will go far toward strengthening a credit which ought to be the best in the world, and will ultimately enable us to replace the debt with bonds bearing less interest than we now pay. ”

“ Governorates and regional governments may, upon notification to the Minister of Finance,
raise funds through borrowings, and issue loan guarantees subject to the debt limit set in the
annual budget law, and to the specific debt limit set for each entity under the apportionment
approved by the Council of Ministers on a recommendation of the Minister of Finance. ”

“ By the present measures, while retaining the privilege of paying the debt within twenty years, we shall secure the alternative of sixty years, and at a largely reduced interest,—leaving the opportunity of paying it at any intermediate time, according to the best advantage of the country. With diminished taxation and resources increasing immeasurably, the national debt will cease to be a burden,—becoming “fine by degrees and beautifully less” until it gradually ceases to exist. ”

“ Should enlarged appropriations be made, the necessary consequence will be to postpone the payment of the debt. Though our debt, as compared with that of most other nations, is small, it is our true policy, and in harmony with the genius of our institutions, that we should present to the world the rare spectacle of a great Republic, possessing vast resources and wealth, wholly exempt from public indebtedness. ”

“ And the result of an examination of only a part of the public loans, will be found to be, “that a capital of more than TWENTY MILLIONS has been a needless addition to the public debt, for which no money, or any sort of equivalent has been received; and which might have been avoided, together with a great expence of interest, by only forming differently the schemes of the public loans.” ”

“ With rigid economy, vigorous salvage operations, and adequate revenues from taxation, a surplus of current receipts over current expenditures can be realized and should be applied to the floating debt. All branches of the Government should cooperate to see that this program is realized. I cannot overemphasize the necessity of economy in Government appropriations and expenditures and the avoidance by the Congress of practices which take money from the Treasury by indefinite or revolving fund appropriations. ”

“ In the face of this enormous debt are we to conclude, with certain authors of repute, that when the payment of the interest on the public debt absorbs more than 40 per cent. of a nation’s revenue, that nation is in the most serious situation, not far removed from bankruptcy? ”

“ It is therefore essential that as soon as possible the State should not only live within its income but should begin to reduce indebtedness, especially the floating debt, which, being largely held by the banks, has been a cause of credit creation on a great scale. ”

“ If a state is poor, and people owe more money than can be procured, a legislature may perhaps go so far as to suspend the collection of debts; or to ordain that a certain part only of the debts shall be recoverable immediately, and the payment of the remainder suspended. This may ease the debtors; but can be justified in extreme cases only, when the people are generally and greatly involved.
[pg 042] A people should not generally be in debt: The consumers of goods should not get credit. Heavy and numerous debts are great evils to a state. ”

“ The ordinary resource in cases of deficit is a loan, but it may well be doubted whether, under the circumstances supposed, the credit of the Government would be particularly good. If loans could be obtained, which is the most favorable supposition, we should be saddled with a debt of about a hundred millions, probably at exorbitant interest, as the cost of this political experiment. ”

“ The bill passed both houses without a division. The highest expectations were founded upon it, for people generally, in common with Pitt himself and Price, regarded the new fund as an infallible means of discharging the national debt solely by the uninterrupted operation of compound interest. That the application of surplus revenue to the payment of debt is sound finance, and that to treat surpluses designed for that purpose as a separate fund is a convenient arrangement need no demonstration. ”

“ In spite of dishonest and subtle counsel, and in spite of great temptation, we have dealt with the public debt on the simple and honest principle that the only thing to do with a debt is to pay it. The National credit is the best in the world, and the National debt has ceased to be an object either of anxiety or consideration. ”

“ As this is the only way in which the means of payment can be obtained, and as therefore much more time will be required for the payment of the debt than was occupied in its creation, it becomes the Government to encourage the industry of the country to the utmost, by freeing it from restrictions. ”

“ The first installment of the loan of $2,000,000 from the Bank of the United States has been paid, as was directed by law. For the second it is necessary that provision be made.
No pecuniary consideration is more urgent than the regular redemption and discharge of the public debt. On none can delay be more injurious or an economy of time more valuable. ”

“ The idea that such a debt is to become permanent should be at all times discarded as involving taxation too heavy to be borne. and payment once in every sixteen years, at the present rate of interest, of an amount equal to the original sum. This vast debt, if permitted to become permanent and increasing, must eventually be gathered into the hands of a few, and enable them to exert a dangerous and controlling power in the affairs of the Government. The borrowers would become servants to the lenders, the lenders the masters of the people. ”

“ It was to be beyond the control of Government, and this fund with its accumulations was to be applied, as circumstances permitted, to the reduction of the debt. The principle is obviously sound as far as it goes, that is to say, what a nation saves it can clearly apply to the purpose of reducing its liabilities, but there the matter ends; there is and can be no peculiar and mysterious power in a sinking fund. ”

“ We should remember that this country is now almost crushed into the very earth with its accumulated burden of public debt, of State debts, of county debts, of city debts, of township debts, of individual debts. ”

“ All modern states, it may be said, have been compelled to have recourse to loans, either to meet war expenses, to carry out great public undertakings or to make up the recurrent deficits of a mismanaged revenue. Resources obtained in this way are what constitute national debt proper. ”

“ But while we have the National debt will it not be well to put it to the best use we can? When at last, after twenty-five or thirty years, we have paid it off until we come down to the last four hundred millions, will it not then be time enough to discuss whether it may be best to pay off that little amount too, or to keep it as a basis for bank circulation? ”

“ This policy undoubtedly checked the process of refunding the public debt, which progressed slowly, and was confined to an exchange of bonds bearing five per cent. interest for those bearing six per cent. ”

“ But I will not examine any more of these loans. Let us next consider how detrimental they have been to the public.
All the savings and surplus monies of the kingdom from 1763 to 1775, have amounted (deducting 400,000l. gained by debts discharged at a discount) to 10.739,793l. and with this sum 11.139,793l. of the national debt has been paid off. (See the Postscript at the end of this work.) —The needless addition which was made to the capital of the national debt, by injudicious schemes for raising money during the last war, exceeded this sum ”

“ The amount of the national debt which matures within less than two years is $792,121,700, of which $500,000,000 bear interest at the rate of 5 per cent, and the balance is in bonds bearing 6 per cent interest. ”

“ Another objection made to the proposal to fund it is, that it is to be paid in full, whilst the funding act authorized the payment of only sixty cents on the dollar of the debts to be replaced by the issue of the consolidated bonds,-the great object of the act being to effect a reduction of the State debt within manageable limits. ”