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Opposition to such spending came from members such as John Randolph and John Taylor of Virginia, who both thought that such local spending was unconstitutional. Lane notes that Martin Van Buren of New York also thought that “Congress had no power to con- struct roads and canals within the states.” Van Buren said that spend- ing on such projects “was sure in the end to impoverish the National Treasury by improvident grants to private companies and State works, and to corrupt Federal legislation by the opportunities it would present for favoritism.”

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President John Quincy Adams came into office in 1825 with grand plans to fund roads, canals, a national university, a new department of interior, new federal courts, and other items. Adams was an intel- ligent and experienced leader, but his expansionary agenda con- flicted with the goal of debt freedom, and it went nowhere in Congress. Lane notes that “the debt question permeated the pro- ceedings of the nineteenth Congress [1825 and 1826] . . . . Every appropriations bill, whether minor or major, underwent intense scrutiny and debate.” Indeed, members were so focused on restrain- ing the budget that they openly challenged spending on military proj- ects in each other’s districts.

Lane argues that Adams’s lack of commitment to debt freedom doomed his presidency. Adams was replaced after the 1828 election by Andrew Jackson, who was a believer in debt elimination and Jeffersonian frugality. On assuming office, Jackson made a list of his priorities, including “the Public debt paid off, the Tariff modified and no power usurped over internal improvements.” In his first inaugural address, he promised “extinguishment of the national debt, the unnec- essary duration of which is incompatible with real independence.”

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Jackson famously vetoed federal funding of Kentucky’s Maysville Road project in 1830, citing constitutional objections and his concern that it interfered with the goal of debt freedom. Lane says that Jackson’s veto and his focus on debt reduction “erased from the national policy agenda” any major program of internal improvement, at least for the time being.

“Jackson knew that, given the choice, Americans would prefer inexpensive government to expensive government-funded roads and canals,” notes Lane. Jackson also knew that federal investments in roads and canals were likely to be flops. In his 1830 message to Congress, he said “positive experience, and a . . . thorough consider- ation of the subject, have convinced me of the impropriety as well as inexpediency of such investments.”

Jackson’s observations about what we now call “crony capitalism” were astute. He noted, for example, that when the government gave initial subsidies to companies, they tended to get hooked on the handouts and keep coming back for more. He also noted that busi- ness subsidies placed public funds under the “management and control” of “an authority unknown to the Constitution, and beyond the supervision of our constituents.”

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Lane argues that the goal of debt freedom “factored into all the major policy decisions of [Jackson’s] two administrations,” including the Nullification Crisis of the early 1830s. That crisis revolved around the fact that high federal tariffs favored the commercial and manu- facturing states in the northeast and hurt the agricultural South. South Carolina’s John C. Calhoun argued that the impending elimi- nation of the federal debt meant that tariffs should be slashed because the revenues would no longer be needed to pay the interest or principal. Jackson was neither a free trader nor a strong protec- tionist, but he hesitated to reduce tariffs until the debt was paid off. The crisis reached a peak in 1832 when South Carolina declared that the federal tariff laws of 1828 and 1832 were null and void within the state’s borders. Fortunately, the crisis was diffused when agreement was reached on the Compromise Tariff of 1833.