My proposed Constitutional Amendment limiting borrowing term to one year and requiring that the funds be used to pay for goods, not labor - with the exception of declared wars by Congress:
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To finance the operations of the Federal government, Congress shall only have the power to borrow money on the credit of the United States where the term of the debt issued is not more than one year, and those funds must be used to make purchases; said funds can not be used to pay employees of the Federal government nor can they be used to pay labor costs associated with services that the Federal government purchases, or services provided which are related in any way to goods that the Federal government purchases.
In time of War, where such War is declared by Congress, Congress shall have the power to borrow money where the debt issued is used solely to fund specific Wars so declared and can be of any term and used for any military combat purpose which is specifically related to such declared War. Until such War debt is repaid fully, any increase in the total annual expenditure of the Federal government shall be prohibited.
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This will make sure that the Federal government is not creating a bloated bureaucracy by borrowing. And, when they spend on goods, if those goods are made by American companies, their spending actually creates private sector jobs, instead of Federal jobs which then require taxation to sustain. Borrowing will be constrained because bondholders would be evaluating the government’s ability to repay within one year, not assuming they can repay or rollover 5, 10 or more years from now. The appetite for buying 1 year bonds would be more limiting than what we have now, and employees would HAVE TO be paid out of CURRENT TAX REVENUE ONLY.
Were today's leaders to adhere to the Founders' formula for liberty, "We, the People" and our posterity would not be burdened with an unprecedented level of debt.
See the following essay for their concept of the economic dimension of liberty. It is excerpted from "Our Ageless Constitution," a 292-page history of the ideas of liberty in America, again available after 20 years of being out of print.
"Agriculture, manufactures, commerce, and navigation, the four pillars of our prosperity, are the most thriving when left most free to individual enterprise." - Thomas Jefferson
"The enviable condition of the people of the United States is often too much ascribed to the physical advantages of their soil & climate .... But a just estimate of the happiness of our country will never overlook what belongs to the fertile activity of a free people and the benign influence of a responsible government." - James Madison
America's Constitution did not mention freedom of enterprise per se, but it did set up a system of laws to secure individual liberty and freedom of choice in keeping with Creator-endowed natural rights. Out of these, free enterprise flourished naturally. Even though the words "free enterprise' are not in the Constitution, the concept was uppermost in the minds of the Founders, typified by the remarks of Jefferson and Madison as quoted above. Already, in 1787, Americans were enjoying the rewards of individual enterprise and free markets. Their dedication was to securing that freedom for posterity.
The learned men drafting America's Constitution understood history - mankind's struggle against poverty and government oppression. And they had studied the ideas of the great thinkers and philosophers. They were familiar with the near starvation of the early Jamestown settlers under a communal production and distribution system and Governor Bradford's diary account of how all benefited after agreement that each family could do as it wished with the fruits of its own labors. Later, in 1776, Adam Smith's INQUIRY INTO THE NATURE AND CAUSES OF THE WEALTH OF NATIONS and Say's POLITICAL ECONOMY had come at just the right time and were perfectly compatible with the Founders' own passion for individual liberty. Jefferson said these were the best books to be had for forming governments based on principles of freedom. They saw a free market economy as the natural result of their ideal of liberty. They feared concentrations of power and the coercion that planners can use in planning other peoples lives; and they valued freedom of choice and acceptance of responsibility of the consequences of such choice as being the very essence of liberty. They envisioned a large and prosperous republic of free people, unhampered by government interference.
The Founders believed the American people, possessors of deeply rooted character and values, could prosper if left free to:
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Such a free market economy was, to them, the natural result of liberty, carried out in the economic dimension of life. Their philosophy tended to enlarge individual freedom - not to restrict or diminish the individual's right to make choices and to succeed or fail based on those choices. The economic role of their Constitutional government was simply to secure rights and encourage commerce. Through the Constitution, they granted their government some very limited powers to:
Adam Smith called it "the system of natural liberty." James Madison referred to it as "the benign influence of a responsible government." Others have called it the free enterprise system. By whatever name it is called, the economic system envisioned by the Founders and encouraged by the Constitution allowed individual enterprise to flourish and triggered the greatest explosion of economic progress in all of history. Americans became the first people truly to realize the economic dimension of liberty.
Footnote: Our Ageless Constitution, W. David Stedman & La Vaughn G. Lewis, Editors (Asheboro, NC, W. David Stedman Associates, 1987) Part III: ISBN 0-937047-01-5