How National Debt Restricts Individual Liberty

By: David McCaleb
David McCaleb is a writer and national bestselling novelist. Books →

Over half the settlers of the early American colonies sold themselves into contractual servitude to pay for the impossibly high cost of their transport across the Atlantic. Termed “indentured servants”, these people were subject to their master’s will during their debt period, which usually lasted five to seven years. These newcomers were willing to live in bondage for a time so that afterwards they might avail themselves of the opportunities offered in the new land.

Tall ship on water.

However, imagine now if that debt period were too long for one lifetime and could be extended to the children. This would involve parents selling even their descendants into bondage and would represent nothing less than slavery. However, this is exactly what the U.S. government is doing to its future citizens.

Each year our leaders increase our debt burden, never attempting to settle it, but loading it upon our children’s backs. In so doing, they require the next generation to pay the interest on debt they did not borrow, for services they did not receive, selling them into a form of financial slavery, thereby subjugating them to an indentured economic servitude.

As parents, we want to leave our children a legacy, whether just fond memories of a loving upbringing or perhaps even an inheritance, no matter how small. However, as of 2023, each citizen’s share of national debt stands at over $100,000 1. Thus, with every birth certificate issued, our government immediately levies upon them a six-figured financial burden, then continues to increase it each passing year.

Symptoms of a Problem

In 2023 the U.S. paid $659 billion in interest expense, almost 11% of all spending 2. If that 11% were properly invested in projects and activities which would spur the economy to increase tax revenue in the long-term, that would be acceptable. But instead, it was spent to cover day-to-day operating expenses. Effectively, the government spent 11% of its income on credit card interest, and this debt continues to grow uncontrolled.

A debt-laden country is weak and conflicted. Borrowing ties our government to the whims of its debt holders, many of them foreign entities, and incentivizes our leaders to placate them versus serving its own citizens. In this manner, national debt produces a clear conflict of interests. The Suez Crisis in 1957 is a prime example. During that event, Britain was cowed by its debt holders and their prime minister resigned in shame. Historians note this as the point when Britain ceased to be a world power, and it was all thanks to their debt load. Debt is a foothold for other nations to influence the borrowing country, thus is a threat to national security.

The pitfalls of national debt are many. Below are a few:

  • Eats away available tax revenue.
  • Restricts beneficial government activities.
  • Reduces long-term financial stability.
  • Increases tax need, thereby increasing tax rates.
  • Levies a conflict of interests upon the nation’s leadership (see above).
  • Threatens national security (see above).
  • Limits the nation from responding to crisis, such as natural disasters or war.
  • Restricts the economy’s ability to absorb shock.
  • Increases interest costs.
  • Increases risk of financial crisis.
  • Increases inflation.
  • Lowers economic growth.

However, not all national debt is bad.

Proper Use of Government Debt

Debt is beneficial only when its use produces a greater return. I hold an MBA, worked as a financial analyst, and was a successful entrepreneur. Debt is a powerful lever when used properly, but a crippling cancer when employed carelessly. In business, we refer to proper debt as “leverage” due to its ability to multiply effort. For example, if a widget manufacturer has an opportunity to compete for a large contract, they may borrow money (leverage) to purchase more machinery so they can win the contract and deliver the quantities required. Using leverage, they produce a profit greater than the debt borrowed.

"Debt is beneficial only when its use produces a greater return."

This principle applies equally to governments. Proper government debt must produce a greater return. Even enormous projects such as the US interstate system and the Hoover Dam were initiated only once our government decided how these efforts would pay for themselves in the coming decades. Investment projects such as these can spur the economy and produce continuous, long-term benefits.

Hoover Dam
Hoover Dam Complex

Another proper use of government debt is to provide financial stability during emergencies, primarily war. When a nation finds itself at war, the entire economy is affected. Enormous amounts of material, equipment, and facilities are needed. Emergency borrowing during wartime helps a country ensure its survival. If already burdened with debt, a nation has little capacity to borrow and will not withstand larger threats.

The Core Issue

But improper borrowing is merely a symptom of a larger issue. Let me illustrate. If the U.S. somehow paid off our debt overnight, we’d soon find ourselves right back in financial bondage because we would still be spending much more than we take in. The greater issue is mindset.

Our country’s leadership fosters an unhealthy mindset toward non-investment debt. They consider it an ally, ignoring its adversarial impacts. Healthy organizations understand that non-investment debt is a cancer and will avoid it at all costs. They’ll reduce spending, cut staff, close locations, and enact radical changes to save the core business because they know that if they wade into the warm waters of operational borrowing, that way leads to the failure of the entire enterprise. Instead, our leaders have been gaslighted into thinking that debt is the answer to budgetary shortfalls, that the cancer is the cure.

But our country hasn’t always harbored this attitude. Our forefathers abhorred the shackles of debt. After each war, like indentured servants, they labored for years to pay down our nation’s borrowing. But in the early 1970’s our government lapsed into fiscal apathy and began financing a portion of its day-to-day activities with debt. Thus began the predictable and vicious cycle in which we are caught today, borrowing more each year just to pay the interest on previous borrowing.

Fortunately, there is a solution.

Resolving Debt

To free ourselves from national debt, we need to change our mindset. First, we must remember that we are a, “government of the people, by the people, for the people.” 3 Our leaders are us. Don’t fool yourself into thinking the mindset of a debt-loving government didn’t start with its own citizens. We need to extinguish our affair with improper borrowing, then demand the same from our nation’s leaders. Our government must reduce spending and pay back our existing debt.

I speak from experience. As an entrepreneur, I led a debt-laden business to financial freedom. We reduced expenses by focusing only on our core business. I took a 20% cut in salary. Staff took a 10% cut. Was this fair? No. Staff was paying the price for prior management’s lack of leadership. But we eventually increased salaries again and remained open to serve our clients, emerging stronger and united. Climbing out of debt is difficult, but worth the investment.

The other option? Keep spending as-is and eventually go bankrupt. It may take decades or an entire century, but it will happen. Borrowing for day-to-day expenses only reduces future available funds until even debts cannot be paid. You can’t cheat math.

Remember, we are a government of the people, thus we are immorally enslaving our children, chaining them with generational debt, reverting to a society of indentured servants, and condemning our citizens to financial bondage. No matter the counter argument, we can all agree that one generation does not have the right to levy debt upon another. The problem isn’t debt, but our own undisciplined mindset.

" generation does not have the right to levy debt upon another."

But don’t be discouraged. This is good news! The cure is within our control. We don’t need to look elsewhere for it. Even more, economic freedom from debt is achievable. Government debt only makes sense when solidly invested in projects that increase long-term tax revenue. Demand this from your government leaders. We are a government of the people, and periodically should remind our leadership of that.

Do it! Click the button!

Tell them, “Government debt restricts individual liberty, a right guaranteed in the U.S. Constitution.” Then, send them this this article.

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  1. YCharts, US Public Debt Per Capita
  2. Committee for a Responsible Federal Budget
  3. President Abraham Lincoln, Gettysburg Address