It is an understatement to state that federal government spending is out of control. The national debt is $20 trillion and this does not include the unfunded liabilities of entitlement programs such as Social Security, Medicare, and Medicaid. The federal budget process is broken and the debate over government spending often centers on cutting the rate of increase in spending. The national debt represents a major threat to both our economic and national security. As a nation, we need to learn a lesson from President Calvin Coolidge and return not only to sound budgeting principles but also begin the process of reducing spending and paying down the national debt.
A fundamental aspect of Calvin Coolidge’s philosophy was that he did not separate economics and morals. He saw them as one and the same. This was especially true during Coolidge’s presidential administration. Coolidge regarded “a good budget as among the noblest monuments of virtue.” Coolidge also believed that the issue of taxation was also a moral issue. As he stated:
Realizing that the power to tax is the power to destroy, and that the power to take a certain amount of property or income is only another way of saying that for a certain portion of his time a citizen must work for the government, the authority to impose a tax on the people has been most carefully guarded.
The safeguard which Coolidge referred to was the constitutional mechanisms of checks and balances and separation of powers, which are the foundational design of the Constitution. He argued that:
These precautions have been taken because of the full realization that any oppression laid upon the people by excessive taxation, any disregard of their right to hold and enjoy the property which they have rightfully acquired, would be fatal to freedom.
Coolidge’s moral economic philosophy or “economy in government” was tied to his devotion to the Constitution. For Coolidge keeping a budget in balance with reasonable tax rates was not just sound economic policy, but also both moral and constitutional. A federal government that was limited was not only the best economic policy for growth but also it was moral in the sense that it protected economic liberty and the Constitution.
It was also understood by Coolidge that economic policy could be abused and move in an unconstitutional direction, which could threaten individual liberty. This was especially true in regard to excessive taxation and out-of-control spending. That is why both Warren G. Harding and Coolidge made “economy in government” a pillar of their respective administrations. Coolidge warned:
A government which lays taxes on the people not required by urgent public necessity and sound public policy is not a protector of liberty, but an instrument of tyranny. It condemns the citizen to servitude. One of the first signs of the breaking down of free government is a disregard by the taxing power of the right of the people to their own property. It makes little difference whether such a condition is brought about through the will of a dictator, through the power of a military force, or through the pressure of an organized minority. The result is the same. Unless the people can enjoy that reasonable security in the possession of their property, which is guaranteed by the Constitution, against unreasonable taxation, freedom is at an end. The common man is restrained and hampered in his ability to secure food and clothing and shelter. His wages are decreased; his hours of labor are lengthened.
As Vice President under President Harding, Coolidge understood the difficult nature of the fight to implement economic policies rooted in limited government. In 1921 the Harding administration was confronted with a severe economic crisis, the depression of 1920-1921, which saw high unemployment and a major downturn in business. Harding’s response was to restore the economy by returning to constitutional principles, which meant slashing spending, taxes, and paying down the national debt. Both Harding and Coolidge saw these policies not only essential for returning prosperity to the national economy but also fundamental to preserving a constitutional limited government.
Coolidge described his pursuit of “economy in government” as “a full test of our national character,” and it was “worthy of our highest endeavor.” An out-of-control budget and high taxation was a major threat to the character of the nation. As Coolidge stated:
We must have no carelessness in our dealings with public property or the expenditure of public money. Such a condition is characteristic either of an undeveloped people, or of a decadent civilization. America is neither. It stands out strong and vigorous and mature. We must have an administration which is marked, not by the inexperience of youth, or the futility of age, but by the character and ability of maturity. We have had the self control to put into effect the Budget system, to live under it and in accordance with it. It is an accomplishment in the art of self government of the very highest importance. It means that the American Government is not a spendthrift, and that it is not lacking in the force or disposition to organize and administer its finances in a scientific way. To maintain this condition puts us constantly on trial. It requires us to demonstrate whether we are weaklings, or whether we have strength of character. It is not too much to say that it is a measure of the power and integrity of the civilization which we represent.
The pursuit of “economy in government” was an uncompromising goal that Coolidge achieved while President. “The very fact that the federal government has been able to cut down expenditures, decrease it indebtedness, and reduce its taxes indicates how great is the accomplishment which you have made in behalf of the people of the nation,” stated Coolidge to his administration. The result was a period of economic growth and expansion during the 1920s.
Coolidge also leaves us a warning today that if the federal government and the citizenry drift away from both economy in government and constitutional principles the result will be devastating:
One of the chief dangers to the success of popular government is that it will throw away self-restraint and self-control and adopt laws, which being without sound economic foundation, bring on such a financial distress as to result in want, misery, disorder, and the dissolution of society.
Coolidge’s leadership in regard to budget and tax policy serves as a reminder for the nation today that not only is limited government good for a strong national economy, but it also takes a moral commitment from both citizens and policymakers to uphold constitutional principles.
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