This is an analysis of pre-WWII records of the national debt,
going back to 1790. The idea is to look at how things have
changed and what happened back then to make a difference in how
the debt has grown since then.
Details on some of the factors affecting the collection of the
data found at the end of the commentary.
The national debt is really not that difficult to deal with, you
know. Look at history. Yes, there has not been one single year
since this country was founded that it was debt free, but there
were multiple times where the debt was drastically reduced.
In researching that I looked for a reduction of 40%-50% or more
in the pre-Civil War period, and after the Civil War I looked at
debt as a percentage of GNP as well as dollar reduction. Before
1890 I didn't find stats on the GNP.
readily available. I'm not getting paid for this after all. Oh,
and they used GNP rather than GDP then. Not enough difference to
matter for this purpose.
From 1790 till 1930 I find 7 times when the dollar amount of the
debt went down to those specs, 1803-1811, 1815-1835, 1838-1839,
1843-1847, 1851-1857, 1866-1893, 1919-1930.
From 1890 to 1930 twice it went down enough as percent of GNP I
feel confident in calling it on the road to, if not paying off
the debt, then making it trivial. Twice, 1835 and 1915, I call
it so close to paying off the debt it could have been done.
The actual debt went from $127 million in 1815 to $38 thousand
in 1834. I call that on the road to paying it off, but that was
the dollar amount low point. By 1915 the debt was at aprox 2.5%
of GNP. IOW, by spending 1/2 of one percent of GNP every year
for 5 years we could have paid it off. In 1930 the debt debt was
at 16% of GNP, again, awfully close to payoff range, in my
opinion.
So, just how did that happen? Well, graphing federal spending it
became immediately clear. The debt was brought down drastically
by cutting federal spending........ on the military.
You weren't expecting that, were you?
Yes, it was cuts in military spending that brought the debt
down. Every time in the pre-1930s US a major reduction in debt
was during a period of low military spending. So, it appears to
be simple, just cut military spending and you cut the debt.
Note, that does not mean low social welfare spending.
(Republicans call everything not military "social welfare".)
Much of that time social welfare spending was higher than
military spending, and it went up while military spending was
down. Even when military spending went up, social welfare
spending sometimes went up, yet the debt stayed down. When
the debt did jump it followed military spending jumps.
However, that leaves the question, why, if they so drastically
cut the debt, didn't they continue on that route to pay off the
debt? Well, let's look. The 1835 and 39 declines seem to have
ended with recessions so bad as to qualify as depressions, the
worst this country saw before the Civil War. The 1840s into the
1850s showcased three major recessions, plus a war. The
Mexican-American war may not be on the top of your list, but
spending sure shot up.
As to the others, oh yeah, when the debt fell by so much, then
it shot up again, that was when military spending jumped
drastically.
Now why was that? I'll just speculate. When you drastically cut
military spending, you drastically reduce your military. Now,
nice as we like to think people are, there are always some who
will look around, find you are weak, and decide it's a good time
to take what you have. Or maybe they just want to knock you
down a peg. So, when the debt drops drastically, we have a war
to bring it back up.
That appears to be about how it goes. Major spending increases
are actually major military spending increases during that time
frame. So, do we cut the military, drastically reduce the
budget, then get a war, or do we try to think it through just a
bit better?
Notice I focused on the period from 1790, the first year I
could find these numbers for, until 1930. I chose that time
frame because, from 1930 on everything changed. Between 1919 and
1930 the debt dropped, as I said, to 16% of GDP. From 1920 to
1930 this country had 11 consecutive balanced budgets, the
longest string of the 20th century. Then came the Great
Depression. Seems balanced budgets of the 20th century are
consistently followed by recessions. The longest strings seem to
have the worst recessions .
The national debt went up to 50% of GNP by 1940, at which time
GNP was back to where it was in 1930. Don't even start to think
that was all because of increased social welfare spending.
Remember, that $16 Billion in debt was 16% of GNP when the GNP
was $100 billion. In the first few years of the depression the
GNP dropped 46%. When that $100 billion dropped 46% that 16%
turned into aprox 28% of GNP. All that before borrowing one
penny more. Ten years of depression just under doubled the debt
to GNP ratio. After that World War II kept it climbing, so fast
and skyrocketed the economy so much that by comparison the
depression was trivial. Yes, military spending did it again.
Since World War II we have not had a year of low military
spending. Even the Vietnam war only increased military spending
a relatively small percentage of GDP. Military spending did go
lower, but not much, and not for long.
Before World War II we could, and were, attacked by foreign
foes, but it was difficult for them to launch and supply any
military effort over that distance. In World War II and after we
learned, the oceans no longer protect us. We are vulnerable to
attack, and with today's weapons, destruction.
Most of the numbers here came from the Govt Printing Office's
publication, "Historical Statistics of the United States From
Colonial Times to 1970", Bi-Centennial edition.
Please note that figures before WWII may differ from post WWII
figures, and the older they get the more they may differ. In
earlier years the numbers were far less rigorously collected,
that and communication difficulties made them much less
reliable.
Throughout this I used current dollars, not constant, or
inflation adjusted, numbers. Since I was looking at the dollar
amount of the debt so inflation adjustment was not applied. That
plus, the record difficulties make inflation adjustment for very
old data difficult. Also, I broke up my research into
pre-Civil War, pre-WWI, and Pre-WWII. The scale of the numbers
jumps drastically between those periods.
I did not, in this case, look much at post WWII because there
has been no time since WWII that the debt went down
significantly, and no time that military spending went down very
much or for very long. Which makes it a different situation.
Which is another way of saying, after Dec 7, 1941, everything
changed.
.. War is God's way of teaching us geography.
Hello Bob,
This is an analysis of pre-WWII records of the national debt,
going back to 1790. The idea is to look at how things have
changed and what happened back then to make a difference in how
the debt has grown since then.
Haven't you learned anything from what Dick Cheney taught
you? Deficits don't matter. Nor does the national debt.
Think about it.
Details on some of the factors affecting the collection of the
data found at the end of the commentary.
In the future world of Star Trek, no humans use money as
money has become a thing of the past. Klingons just take,
as they are a warrior race, never having had the need or
want for money. And Vulcans, well, sometimes they are too
into themselves to even notice if money exists.
The national debt is really not that difficult to deal with, you
know. Look at history. Yes, there has not been one single year
since this country was founded that it was debt free, but there
were multiple times where the debt was drastically reduced.
A debt-free economy would be a doomsday scenario. It would
be like having an economy encased in concrete.
In researching that I looked for a reduction of 40%-50% or more
in the pre-Civil War period, and after the Civil War I looked at
debt as a percentage of GNP as well as dollar reduction. Before
1890 I didn't find stats on the GNP.
It was always boom and bust, the federal government being
weak in comparison to what it is today.
readily available. I'm not getting paid for this after all. Oh,
and they used GNP rather than GDP then. Not enough difference to
matter for this purpose.
Not many taxes were collected in those days.
From 1790 till 1930 I find 7 times when the dollar amount of the
debt went down to those specs, 1803-1811, 1815-1835, 1838-1839,
1843-1847, 1851-1857, 1866-1893, 1919-1930.
The federal government did not have many programs back then.
Aside from funding our military, there really wasn't much
else that needed to be funded.
From 1890 to 1930 twice it went down enough as percent of GNP I
feel confident in calling it on the road to, if not paying off
the debt, then making it trivial. Twice, 1835 and 1915, I call
it so close to paying off the debt it could have been done.
Two big wars - The War of Northern Aggression and WWI -
along with the Spanish-American War. Nothing else of any
consequence was funded during that time frame.
The actual debt went from $127 million in 1815 to $38 thousand
in 1834. I call that on the road to paying it off, but that was
the dollar amount low point. By 1915 the debt was at aprox 2.5%
of GNP. IOW, by spending 1/2 of one percent of GNP every year
The Mexican-American War occurred prior to the War of
Northern Aggression, but that cost was trivial.
So, just how did that happen? Well, graphing federal spending it
became immediately clear. The debt was brought down drastically
by cutting federal spending........ on the military.
You do not cut your way out of a Great Depression or Great
Recession. In order to make money, you have to spend money.
Preferably other peoples' money. That is the way it works
for an economy to grow.
You weren't expecting that, were you?
Austerity might sound good, but in actuality is pure evil.
Yes, it was cuts in military spending that brought the debt
down. Every time in the pre-1930s US a major reduction in debt
was during a period of low military spending. So, it appears to
be simple, just cut military spending and you cut the debt.
If it was "cuts in military spending that brought the debt
down" then why did it lead to the Great Depression and
WWII?
Today we are enjoying the Great Recession (nobody
wants to call it another Great Depression). Republicans
have brought austerity to the table, calling it their
solution to the crisis.
Democrats went along with it, with
the Budget Control Act of 2011. And now our young people
are reaping the benefits, having no choice but to live at
home with mom and dad, dependent on them for everything, as
the only jobs they might be lucky enough to find are
flipping burgers at some fast food joint or working at some
retail store such as wally world, part timers with meager
wages.
Note, that does not mean low social welfare spending.
(Republicans call everything not military "social welfare".)
Much of that time social welfare spending was higher than
military spending, and it went up while military spending was
down. Even when military spending went up, social welfare
spending sometimes went up, yet the debt stayed down. When
the debt did jump it followed military spending jumps.
Cutting food stamps makes much more sense than gutting our
military. After all, people can eat the burgers they make
at fast food joints. Or dig in the trash cans outside those
fast food joints when nobody else is looking.
However, that leaves the question, why, if they so drastically
cut the debt, didn't they continue on that route to pay off the
debt? Well, let's look. The 1835 and 39 declines seem to have
ended with recessions so bad as to qualify as depressions, the
worst this country saw before the Civil War. The 1840s into the
1850s showcased three major recessions, plus a war. The
Mexican-American war may not be on the top of your list, but
spending sure shot up.
There were no federally-funded social programs in those
days. Nor were food stamps available. People lived off the
land, and paid little if any taxes. In times of war,
people die. Rich folks know that, which is why they
recruited folks who lived on the farm. Life was cheap, and
usually short, in those days.
Now why was that? I'll just speculate. When you drastically cut
military spending, you drastically reduce your military. Now,
The greatest asset a country has is human resources.
Sending our young men and women off to war is depleting our
national treasure. But warmongers refuse to look at things
that way ...
That appears to be about how it goes. Major spending increases
are actually major military spending increases during that time
frame. So, do we cut the military, drastically reduce the
budget, then get a war, or do we try to think it through just a
bit better?
By cutting our military we get a peace dividend. Rather
than cutting the budget (austerity), we should use that
peace dividend for government programs that help the poor
and middle class. The very wealthy can look after
themselves, and be thankful for what this country has
already given them.
Notice I focused on the period from 1790, the first year I
could find these numbers for, until 1930. I chose that time
frame because, from 1930 on everything changed. Between 1919 and
FDR did not have an ideology. He did what needed to be
done, bringing this country out of the Great Depression and
defending this country from a world gone mad. Various
government programs were enacted that helped the poor and
middle class, along with saving the wealthy from
themselves. Yes, FDR saved the wealthy from themselves.
Had he not done that, the wealthy would have been among the
poor and homeless.
Republicans believe in shock economics. Bring a country to
its knees by decimating the economy through austerity, then
start a war to get the economy booming. Maggie Thatcher
Since World War II we have not had a year of low military
spending. Even the Vietnam war only increased military spending
a relatively small percentage of GDP. Military spending did go
lower, but not much, and not for long.
Had it not been for the Cold War, the peace dividend would
have been HUMONGOUS. President Truman would have ended the
Before World War II we could, and were, attacked by foreign
foes, but it was difficult for them to launch and supply any
military effort over that distance. In World War II and after we
learned, the oceans no longer protect us. We are vulnerable to
attack, and with today's weapons, destruction.
Japan bombed our ships to smithereens at Pearl Harbor
without much difficulty.
Al-Qaeda terrorists used
passenger airplanes as guided missiles to bring down two
WTC towers (a third WTC also collapsed), plus damaging the
Pentagon, without much difficulty. The point is, we will
always be vulnerable to attack, regardless of the size of
our military. Making our military larger is not going to
prevent such attacks from happening.
Most of the numbers here came from the Govt Printing Office's
publication, "Historical Statistics of the United States From
Colonial Times to 1970", Bi-Centennial edition.
Yeah. Mark Twain said something about statistics. And he
wasn't very flattering about it.
Google "shock economics" and you will begin to understand
the Republican modus operandi in today's modern world.
An interesting analysis. However, another grouping might
reveal a deeper insight -
* Washington to Lincoln
* Lincoln to FDR
* FDR to Obama
If there was one war to distinguish different periods, the Spanish-American War comes to mind. That war distinguishes
when the US became a global power. Some might cite WWII as
a better example, but in my view the Spanish-American War
gave the US more influence.
I did not, in this case, look much at post WWII because there
has been no time since WWII that the debt went down
significantly, and no time that military spending went down very
much or for very long. Which makes it a different situation.
Marxian economics would postulate the stronger economy would
always win in a contest (war) between nations. However, as
we have learned from experience, a determined foe can make
the cost of victory too prohibitive to keep (e.g. Iraq,
Afghanistan).
Which is another way of saying, after Dec 7, 1941, everything
changed.
Japan became our friend. Germany became our friend. Italy
became our friend. Russia became our friend. China became
our friend. The whole world became our friend. Bill
Clinton left office, leaving this country with a surplus,
along with the highest approval rating in history of any
president. And then George W. Bush went and blew it,
turning the surplus into a deficit, telling each and every
American to hug their children and go shopping ...
.. War is God's way of teaching us geography.
"Is our children learning?" - George W. Bush
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