LL> Hello Bob,   
      
    BK>> This is an analysis of pre-WWII records of the national debt,   
    BK>> going back to 1790. The idea is to look at how things have   
    BK>> changed and what happened back then to make a difference in how   
    BK>> the debt has grown since then.   
      
    LL> Haven't you learned anything from what Dick Cheney taught   
    LL> you? Deficits don't matter.  Nor does the national debt.   
    LL> Think about it.   
      
    I learned that no member of the Cheney Family should be allowed   
    anywhere near the national check book.   
      
    ...   
      
    BK>> Details on some of the factors affecting the collection of the   
    BK>> data found at the end of the commentary.   
      
    LL> In the future world of Star Trek, no humans use money as   
    LL> money has become a thing of the past.  Klingons just take,   
      
    That was in the early Star Treks. By Deep Space 9 they had come   
    up with a form of money, Gold Pressed Latinum.   
      
    LL> as they are a warrior race, never having had the need or   
    LL> want for money.  And Vulcans, well, sometimes they are too   
    LL> into themselves to even notice if money exists.   
      
    Long time ago I read a book in which the author mentioned going   
    into a bank at the Vatican. He suggested to the teller that he   
    must see a lot of people naive about money.   
      
    The teller responsed, "In my experience, no one is naive about   
    money."   
      
    I would disagree with him, but he probably saw a very limited   
    clientele.   
      
    BK>> The national debt is really not that difficult to deal with, you   
    BK>> know. Look at history. Yes, there has not been one single year   
    BK>> since this country was founded that it was debt free, but there   
    BK>> were multiple times where the debt was drastically reduced.   
      
    LL> A debt-free economy would be a doomsday scenario.  It would   
    LL> be like having an economy encased in concrete.   
      
    For a very short time wouldn't be so bad, as long as we avoid   
    war and depression. In the long run it wouldn't work.   
      
    BK>> In researching that I looked for a reduction of 40%-50% or more   
    BK>> in the pre-Civil War period, and after the Civil War I looked at   
    BK>> debt as a percentage of GNP as well as dollar reduction. Before   
    BK>> 1890 I didn't find stats on the GNP.   
      
    LL> It was always boom and bust, the federal government being   
    LL> weak in comparison to what it is today.   
      
    The number of recessions before WWII amazed me. And their depth.   
    The small ones were worse than anything after WWII until the   
    current one. This one is not as bad for depth, but length is   
    awful. It started in 2007 and is still going on.   
      
    BK>> readily available. I'm not getting paid for this after all. Oh,   
    BK>> and they used GNP rather than GDP then. Not enough difference to   
    BK>> matter for this purpose.   
      
    LL> Not many taxes were collected in those days.   
      
    They were in war time.   
      
    BK>> From 1790 till 1930 I find 7 times when the dollar amount of the   
    BK>> debt went down to those specs, 1803-1811, 1815-1835, 1838-1839,   
    BK>> 1843-1847, 1851-1857, 1866-1893, 1919-1930.   
      
    LL> The federal government did not have many programs back then.   
    LL> Aside from funding our military, there really wasn't much   
    LL> else that needed to be funded.   
      
    Actually, most of the time non-military spending was close to,   
    or more than, military spending. Building a country was   
    expensive.   
      
    When military spending went down the debt went down. Then came   
    another war and both went back up.   
      
    BK>> From 1890 to 1930 twice it went down enough as percent of GNP I   
    BK>> feel confident in calling it on the road to, if not paying off   
    BK>> the debt, then making it trivial. Twice, 1835 and 1915, I call   
    BK>> it so close to paying off the debt it could have been done.   
      
    LL> Two big wars - The War of Northern Aggression and WWI -   
    LL> along with the Spanish-American War.  Nothing else of any   
    LL> consequence was funded during that time frame.   
      
    There was no War of Northern Aggression, unless you count   
    Canada's part in the War of 1812. If you count 1890 to 1930, WWI   
    was the only biggie. Between 1835 and 1915 the Civil War was the   
    biggie.   
      
    BK>> The actual debt went from $127 million in 1815 to $38 thousand   
    BK>> in 1834. I call that on the road to paying it off, but that was   
    BK>> the dollar amount low point. By 1915 the debt was at aprox 2.5%   
    BK>> of GNP. IOW, by spending 1/2 of one percent of GNP every year   
      
    ...   
      
    LL> The Mexican-American War occurred prior to the War of   
    LL> Northern Aggression, but that cost was trivial.   
      
    Yet there was a spike in military spending and debt, to $57Mill.   
    Big compared to previous years, but trivial compared to the   
    Civil War.   
      
    BK>> So, just how did that happen? Well, graphing federal spending it   
    BK>> became immediately clear. The debt was brought down drastically   
    BK>> by cutting federal spending........ on the military.   
      
    LL> You do not cut your way out of a Great Depression or Great   
    LL> Recession. In order to make money, you have to spend money.   
    LL>  Preferably other peoples' money.  That is the way it works   
    LL>  for an economy to grow.   
      
    The times when the debt went down were times of peace, and no   
    major recessions. There were plenty of smaller recessions, but   
    that didn't stop the decline in debt.   
      
    BK>> You weren't expecting that, were you?   
      
    LL> Austerity might sound good, but in actuality is pure evil.   
      
    True.   
      
    BK>> Yes, it was cuts in military spending that brought the debt   
    BK>> down. Every time in the pre-1930s US a major reduction in debt   
    BK>> was during a period of low military spending. So, it appears to   
    BK>> be simple, just cut military spending and you cut the debt.   
      
    LL> If it was "cuts in military spending that brought the debt   
    LL> down" then why did it lead to the Great Depression and   
    LL> WWII?   
      
    Cuts in military spending were frequently followed by war. In   
    this case, however, the Great Depression and WWII maked the   
    change in the whole situation. For the first time the US was   
    truly vulnerable to international attack.   
      
    The Great Depression was largely a matter of the rich soaking up   
    everything, and massive corruption. Just like now.   
      
    LL> Today we are enjoying the Great Recession (nobody   
    LL> wants to call it another Great Depression).  Republicans   
    LL> have brought austerity to the table, calling it their   
    LL> solution to the crisis.   
      
    Republicans have been pushing austerity even during prosperity.   
    That is their mantra, their religion. Except where it suits them   
    to spend, that is.   
      
    LL> Democrats went along with it, with   
    LL> the Budget Control Act of 2011.  And now our young people   
    LL> are reaping the benefits, having no choice but to live at   
    LL> home with mom and dad, dependent on them for everything, as   
    LL> the only jobs they might be lucky enough to find are   
    LL> flipping burgers at some fast food joint or working at some   
    LL> retail store such as wally world, part timers with meager   
    LL> wages.   
      
    No argument with that.   
      
    BK>> Note, that does not mean low social welfare spending.   
    BK>> (Republicans call everything not military "social welfare".)   
    BK>> Much of that time social welfare spending was higher than   
    BK>> military spending, and it went up while military spending was   
    BK>> down. Even when military spending went up, social welfare   
    BK>> spending sometimes went up, yet the debt stayed down. When   
    BK>> the debt did jump it followed military spending jumps.   
      
    LL> Cutting food stamps makes much more sense than gutting our   
    LL> military. After all, people can eat the burgers they make   
    LL> at fast food joints. Or dig in the trash cans outside those   
    LL> fast food joints when nobody else is looking.   
      
    You forgot your sarcasm alert.   
      
    BK>> However, that leaves the question, why, if they so drastically   
    BK>> cut the debt, didn't they continue on that route to pay off the   
    BK>> debt? Well, let's look. The 1835 and 39 declines seem to have   
    BK>> ended with recessions so bad as to qualify as depressions, the   
    BK>> worst this country saw before the Civil War. The 1840s into the   
    BK>> 1850s showcased three major recessions, plus a war. The   
    BK>> Mexican-American war may not be on the top of your list, but   
    BK>> spending sure shot up.   
      
    LL> There were no federally-funded social programs in those   
    LL> days. Nor were food stamps available.  People lived off the   
    LL> land, and paid little if any taxes.  In times of war,   
      
    There were still a lot of cities and towns, and non-military   
    spending often exceeded military spending. After all, building a   
    country was expensive.   
      
    LL> people die.  Rich folks know that, which is why they   
    LL> recruited folks who lived on the farm.  Life was cheap, and   
    LL> usually short, in those days.   
      
    True.   
      
    ...   
      
    BK>> Now why was that? I'll just speculate. When you drastically cut   
    BK>> military spending, you drastically reduce your military. Now,   
      
    ...   
      
    LL> The greatest asset a country has is human resources.   
    LL> Sending our young men and women off to war is depleting our   
    LL> national treasure. But warmongers refuse to look at things   
    LL> that way ...   
      
    True. Also cutting education has that effect.   
      
    BK>> That appears to be about how it goes. Major spending increases   
    BK>> are actually major military spending increases during that time   
    BK>> frame. So, do we cut the military, drastically reduce the   
    BK>> budget, then get a war, or do we try to think it through just a   
    BK>> bit better?   
      
    LL> By cutting our military we get a peace dividend.  Rather   
      
    True, but it's long term. Do you expect congress to think long   
    term. Plus, you reduce the opportunity for rich people   
    corruption. Will congress accept that?   
      
    LL> than cutting the budget (austerity), we should use that   
    LL> peace dividend for government programs that help the poor   
    LL> and middle class.  The very wealthy can look after   
    LL> themselves, and be thankful for what this country has   
    LL> already given them.   
      
    True.   
      
    BK>> Notice I focused on the period from 1790, the first year I   
    BK>> could find these numbers for, until 1930. I chose that time   
    BK>> frame because, from 1930 on everything changed. Between 1919 and   
      
    ...   
      
    LL> FDR did not have an ideology.  He did what needed to be   
    LL> done, bringing this country out of the Great Depression and   
    LL> defending this country from a world gone mad.  Various   
      
    I don't know if that means he didn't have an ideology, but he   
    did what he had to.   
      
    LL> government programs were enacted that helped the poor and   
    LL> middle class, along with saving the wealthy from   
    LL> themselves.  Yes, FDR saved the wealthy from themselves.   
      
    Honesty is the best business policy, when it's backed by law.   
      
    LL> Had he not done that, the wealthy would have been among the   
    LL> poor and homeless.   
      
    Not that that's a bad thing.   
      
    ...   
      
    LL> Republicans believe in shock economics.  Bring a country to   
    LL> its knees by decimating the economy through austerity, then   
    LL> start a war to get the economy booming.  Maggie Thatcher   
      
    An expression of their contempt for the working class.   
      
    ...   
      
    BK>> Since World War II we have not had a year of low military   
    BK>> spending. Even the Vietnam war only increased military spending   
    BK>> a relatively small percentage of GDP. Military spending did go   
    BK>> lower, but not much, and not for long.   
      
    LL> Had it not been for the Cold War, the peace dividend would   
    LL> have been HUMONGOUS.  President Truman would have ended the   
      
    Utopian fantasy deleted.   
      
    ...   
      
    BK>> Before World War II we could, and were, attacked by foreign   
    BK>> foes, but it was difficult for them to launch and supply any   
    BK>> military effort over that distance. In World War II and after we   
    BK>> learned, the oceans no longer protect us. We are vulnerable to   
    BK>> attack, and with today's weapons, destruction.   
      
    LL> Japan bombed our ships to smithereens at Pearl Harbor   
    LL> without much difficulty.   
      
    Other than the fact that the carriers weren't there. That cost   
    them heavily.   
      
    LL> Al-Qaeda terrorists used   
    LL> passenger airplanes as guided missiles to bring down two   
    LL> WTC towers (a third WTC also collapsed), plus damaging the   
    LL> Pentagon, without much difficulty.  The point is, we will   
    LL> always be vulnerable to attack, regardless of the size of   
    LL> our military.  Making our military larger is not going to   
    LL> prevent such attacks from happening.   
      
    Yet not haveing the military means losing without a chance.   
    Hobson's choice.   
      
    BK>> Most of the numbers here came from the Govt Printing Office's   
    BK>> publication, "Historical Statistics of the United States From   
    BK>> Colonial Times to 1970", Bi-Centennial edition.   
      
    LL> Yeah.  Mark Twain said something about statistics.  And he   
    LL> wasn't very flattering about it.   
      
    Was that Twain, or Will Rogers?   
      
    ...   
      
    LL> Google "shock economics" and you will begin to understand   
    LL> the Republican modus operandi in today's modern world.   
      
    Greg Palast mentioned that. Otherwise known as Disaster   
    Capitalism.   
      
    ...   
      
    LL> An interesting analysis.  However, another grouping might   
    LL> reveal a deeper insight -   
      
    LL> * Washington to Lincoln   
    LL> * Lincoln to FDR   
    LL> * FDR to Obama   
      
    One major reason for the grouping I chose was, the size of the   
    numbers jumped so much after the wars I chose as dividers, it   
    was hard to fit them on the same charts.   
      
    The Civil War numbers chart out as practically nothing compared   
    to WWII.   
      
    LL> If there was one war to distinguish different periods, the   
    LL> Spanish-American War comes to mind.  That war distinguishes   
    LL> when the US became a global power.  Some might cite WWII as   
    LL> a better example, but in my view the Spanish-American War   
    LL> gave the US more influence.   
      
    Yet the numbers still won't fit on the same chart.   
      
    BK>> I did not, in this case, look much at post WWII because there   
    BK>> has been no time since WWII that the debt went down   
    BK>> significantly, and no time that military spending went down very   
    BK>> much or for very long. Which makes it a different situation.   
      
    LL> Marxian economics would postulate the stronger economy would   
    LL> always win in a contest (war) between nations.  However, as   
    LL> we have learned from experience, a determined foe can make   
    LL> the cost of victory too prohibitive to keep (e.g. Iraq,   
    LL> Afghanistan).   
      
    Which should have been learned in Vietnam. As one commentator   
    said, we can always go home, they have no place to go. So they   
    either keep fighting or be conquered.   
      
    BK>> Which is another way of saying, after Dec 7, 1941, everything   
    BK>> changed.   
      
    LL> Japan became our friend.  Germany became our friend.  Italy   
    LL> became our friend.  Russia became our friend.  China became   
    LL> our friend. The whole world became our friend.  Bill   
      
    Friend? A bit loose use of the word.   
      
    LL> Clinton left office, leaving this country with a surplus,   
    LL> along with the highest approval rating in history of any   
    LL> president.  And then George W. Bush went and blew it,   
    LL> turning the surplus into a deficit, telling each and every   
    LL> American to hug their children and go shopping ...   
      
    And the right compared him to Churchill.   
      
    BK>> .. War is God's way of teaching us geography.   
      
    LL> "Is our children learning?" - George W. Bush   
      
      
   BOB KLAHN bob.klahn@bex.net   http://home.toltbbs.com/bobklahn   
      
   ... Horror showed on the Princess' face when she realized the frog was French.   
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