The bill does not forgive you because you forgot to read it

CNBC reports that the national debt has now passed $40 trillion, and that some in Congress are refusing to raise the debt ceiling without matching cuts in spending. I will not pretend to know the precise machinery of modern federal finance — I was a printer and a postmaster, not a treasury secretary — but I know what happens when an issuer of paper obligations loses the discipline of eventual redemption. The paper grows plentiful; the goods it buys grow dearer; and the man who saved carefully finds his savings quietly stolen.

I spent years arguing, in Pennsylvania and in the Continental Congress, that paper money can be a civilizing instrument — provided something real stands behind it. A bill of credit backed by taxable land, by genuine produce, by the measurable industry of a colony: that is useful currency. A promise to pay backed only by the promise to borrow more is not money; it is a postponed reckoning. Forty trillion dollars is a very long postponement.

The argument in Washington, as CNBC describes it, is essentially a family quarrel over whether to raise the household credit limit before or after agreeing to spend less. Both parties know the limit will be raised — it always is. What they dispute is the price of the permission. I have sympathy for those who insist on conditions; a borrower with no discipline imposed from outside will rarely impose it from within. But I have equal suspicion of those who invoke fiscal virtue only when the other party holds the pen.

Here is the older truth, which neither party finds convenient: a nation grows rich in the same manner as a household — by producing more than it consumes and being honest about the gap between the two. Hiding the gap behind new borrowing is not prosperity; it is the appearance of prosperity, which is a considerably more expensive thing. Every point of interest paid on $40 trillion is a tax levied on workers who never voted for the spending that created it. That strikes me as taxation of a particularly dishonest kind.

What counsel would I offer the working person reading this? First, do not wait for Congress to model the frugality it will not practice itself. Your own ledger is the one you govern. Second, watch closely what inflation does to your savings over the next several years — that is the mechanism by which deferred public debt becomes a private burden. Third, when politicians of any party promise large benefits without naming the source of payment, apply the simplest test I know: if your neighbor ran his household this way, would you lend him money? The answer usually clarifies the policy.