President Eisenhower’s Warning On U.S. Sovereign Debt Default
First there was Dubai World, and now Greece. As 2009 comes to a close, the first stirrings that the massive deficits and public debts being accumulated by governments across the globe may pose greater risks in the future are beginning to emerge. Recently, a senior Australian politician even warned that the world should anticipate what was once unthinkable-the U.S. federal government defaulting on its debt.
As the United States, in particular, plans on trillion dollar annual deficits for at least the coming decade, one should recall the warning issued by one of the wisest presidents ever to serve in the White House, Dwight D. Eisenhower. On January 17, 1961 President Eisenhower delivered his famous farewell address to the nation. His warning about the dangers regarding the emerging military-industrial complex are well known. Much less recognized was the equally urgent warning Eisenhower articulated regarding excessive government debt. He believed excessive public debt could lead to national insolvency, which would not only bankrupt the American economy, but also its democratic traditions. Here is his prescient warning, which I believe is more timely than ever:
“As we peer into society’s future, we — you and I, and our government — must avoid the impulse to live only for today, plundering for our own ease and convenience the precious resources of tomorrow. We cannot mortgage the material assets of our grandchildren without risking the loss also of their political and spiritual heritage. We want democracy to survive for all generations to come, not to become the insolvent phantom of tomorrow.”
President Dwight D. Eisenhower
Farewell Address to the Nation; January 17, 1961
