Our greatest leaders have found themselves drowning in presidential debt including Thomas Jefferson. Let’s learn what went wrong for our third president and why he could not eliminate debt.
Thomas Jefferson & Presidential Debt
In this series celebrating Presidents’ Day, we’ll be taking a look at how the nation’s greatest leaders tried to get themselves out of their presidential debt as well as the debt of their personal finances.
We’ve saved the best for last – the president who abhorred national debt but could never manage his own debt reduction. Thomas Jefferson, our third president, died with debts of $107,000, which is roughly $2 million today.
Jefferson is an unusual case in that the debt wasn’t entirely due to business failures, poor investments, or a shopaholic wife. Jefferson inherited a significant amount of debt from his father-in-law in 1774. He may have been rich in land and slaves, but farming was not a debt solution.
Of course, some of it was due to his overzealous spending. He lived beyond his means, blowing large sums on construction projects, furnishings, and decorations for his estate, Monticello. Jefferson also had a taste for fine French wine, which did not come cheap. During his eight years as president, his personal wine bill was over $10,000, or $150,000 in today’s currency. That would mean a lot of credit card debt for someone today!
Jefferson also co-signed a loan for a friend in 1818 for $20,000. Unfortunately, his friend passed away shortly thereafter, and Jefferson was forced to take on the unpaid debt. The Panic of 1819 only made his presidential debt worse, lowering real estate values. Price fluctuations on commodities rendered his farm income inadequate and unreliable.
After his presidency, the situation became dire. The press found out that his estate and assets were far under the value of his debts. Americans raised money to try to help get out of debt, but after Jefferson died in 1826, the donations stopped rolling in, and his grandson absorbed the debts. Monticello, as well as Jefferson’s land, slaves, furniture, and more, were sold, and still did not cover the debts.
Learning From Presidential Debt
There is a lot to be learned from Jefferson’s situation and his presidential debt. Jefferson made the most common mistake of all – not keeping a budget. When in office, he went by rough estimates in his head of how much he was spending on dinner parties and wine. Rather than keep track, his spending went awry, and he was shocked when he received the final bill on the way out of the White House.
Prepare for all possibilities by keeping all personal debts low so that your children and loved ones don’t need to absorb your problems after you pass. If you’ve been saddled with debt from a sudden death and not sure how to pay down debt, get help immediately from a certified credit counseling agency.
To speak to a credit counselor today about budgeting and managing your finances, call 800-769-3571.