The Debt Limit Agreement And Why It’s Important

The recent embarrassing kerfuffle over the debt limit was by no means an exercise in perverse factionalism by two stubborn sets of politicians. On the contrary, it was a necessary test of the fundamental direction of the Republic.

From time to time many of us have had occasion to pledge support to our Constitution, the most durable in the world, rightly considered a uniquely successful piece of statecraft. It embodies a division of governmental powers, so that no single element can dominate. By the nature of politics, if one faction can take over, it invariably does. In that environment property is not safe. Sooner or later any despot, any extremist parliament, will start laying hands on private assets, not only through expropriation, but through tax or regulation. (Even in England, a far-left Labour government mounted a powerful and effective attack on capital after World War II.) But attracting capital, and putting it to work using the know-how that accompanies it, is the key to development and growth. (Jefferson’s “life, liberty, and the pursuit of happiness” was originally “and property.” Indeed, I doubt that you can pursue happiness. It seems to arrive, if at all, unbidden.)

image of a The Federalist paper
Thus, say I, only a divided central authority creates stable property rights, central to a growing economy, which incidentally is the solution to full employment.

But is this really democratic, some ask; and suppose the people change their minds about a great question, is our arrangement responsive to their will? No! We are a republic not a popular democracy, that twists and turns like a weathervane. The really fundamental matters should be stable. The popular will is a deplorable guide to foreign affairs and other great matters: little knowledge or perspective. We are, indeed, too responsive to popular whims, and particularly in foreign affairs have for years lurched from one imbroglio to another.

Domestically, should we have a Madisonian divided central authority or a concentrated one à la F.D.R. that can “get things done” more easily? Alas, in modern concentrated government “programs” accumulate, in response to popular desires, until as now in the U. S., they can never be paid for. Obligations become so huge that the national assets are to be cannibalized by running up vast debt secured by your property. Indeed, we have discovered the delight of robbing Peter’s children to pay Paul.

So the debt limit argument is really the limited government persuasion putting its foot down.

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The great philosopher Karl Popper says, “I assert that our own free world is by far the best society which has come into existence during the course of human history.”

And Ira Glasser: “The early Americans did indeed invent a new form of government. But they did more than that: they declared a new purpose for government. That new purpose was the protection of individual rights. No government had ever before been created primarily for that purpose. Before 1787, the role of government was assumed to be the enforcement of community consensus aimed at making citizens ‘virtuous and moral.’ ”

Karl Marx agreed: In “The Communist Manifesto,” published in 1848, he said, “The bourgeoisie, during its rule of scarcely one hundred years, has created more massive and more colossal productive forces than have all preceding generations together.”

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Democracy can be either the rule of law or majority rule. Not both. Majority rule overrides the protection of individual rights. The rule of the majority means the overwhelming power of government in the name of the people. That is why democracy has usually failed.

To quote James Madison, “In a society under the form of which the stronger faction can readily unite and oppress the weaker, anarchy may as truly be said to reign as in a state of nature, where the weaker individual is not secured against the violence of the stronger.” The rule of law, on the contrary, is that the majority must not be able to violate the rights of the minority.

America is the original home of this thinking. In England, liberty started in 1688 with the Glorious Revolution, but that was later than the arrival of the Pilgrims in America.

The Founding Fathers were brilliant in creating a country of freedom in a difficult environment. And American exceptionalism is not only in the field of economics, but in ethics and politics. Alas, American conservatives often do not understand the philosophical pillar of their own political system!

In Letter 51 of The Federalist, Madison says, “But what is government itself but the greatest of all reflections on human nature. If angels were to govern men, neither external nor internal controls on government would be necessary.” So I conclude that American exceptionalism, and the extraordinarily powerful development of the western world since the 17th century, do not depend on history, culture or religion, but on the liberal ideology recognized by the Founding Fathers, and established as the rule of law: that is, the limitation of political power, and respect for individual rights to life, liberty, and the pursuit of happiness – and property.

That is why the argument over the debt limit was more important than it seemed: We are deciding what kind of government we want. ■