When I read that the federal deficit reached two trillion dollars in a single year, I would ask first not whether the sum is large, but from what fund it is drawn. The expenses of a great and civilized state — defending the society, supporting the dignity of the chief magistrate, and all the other necessary expenses of government — must be defrayed somehow. Public stock and public lands are, in my view, both improper and insufficient funds for that purpose in any great and civilized state. The greater part of the expense must therefore be defrayed by taxes of one kind or another, the people contributing a part of their own private revenue to make up a public revenue to the sovereign or commonwealth.
I would distinguish, then, between the sources of general or public revenue. The revenue that must defray the necessary expenses of government may be drawn either from some fund which peculiarly belongs to the sovereign or commonwealth, and which is independent of the revenue of the people, or from the revenue of the people themselves. The article tells us only that outlays climbed at a quicker pace than incoming revenue; it does not tell us which of these two sources has been drawn upon, or in what proportion. That distinction matters, because the stability and permanence of the fund is not the same in each case. Stock and credit are of an unstable and perishable nature, and unfit to be trusted to as the principal funds of that sure, steady, and permanent revenue which can alone give security and dignity to government. Land is a fund of a more stable and permanent nature, and the rent of public lands has accordingly been the principal source of public revenue for many a great nation much advanced beyond the shepherd state.
What I would press upon the reader is that the deficit, as reported, is a statement about the relation between outlays and incoming revenue, not a demonstration of any single cause. The article attributes the widening gap to outlays climbing more quickly than revenue, and I would go no further than the evidence allows. Whether the annual produce of the country is increased or diminished by the arrangement of its revenue is the question that matters, for according as measures tend either to increase or to diminish the value of that annual produce, they must evidently tend either to increase or to diminish the real wealth and revenue of the country.
