National Debt Albatross
July 1st, 2008No one likes to owe money, but we, as a nation, are owing more and more money every year. This is not like a 30 year mortgage, this is like an infinite year mortgage that can never be paid off, because the debt grows every year rather than drops.
I have been asked to review two books in the last three months that have to do with the national debt, Andrew L. Yarrow’s Forgive Us Our Debts (a very well-reasoned study of the debt, its problems, and its solutions), and the more populist work, Where Does the Money Go?, by Bittle and Johnson. Both sound the alarm, both work hard to be non-partisan, and both succeeded in elevating in my mind the need for a reduction of the national debt.
Long ago I read and reviewed a fairly hefty, scholarly, historical study of national debt in free countries, especially Great Britain. It is called A Free Nation Deep In Debt. Frankly, I like history, and I enjoyed the historical approach of the book. Its thesis was that a free nation can borrow far more than a totalitarian nation because it is far less likely to default, thus in crisis situations, when push comes to shove, should a conflict arise, the free nation will be able to raise more resources to fight a war and thus will most often be the winner of the struggle, even with a deficit of manpower and other natural resources (See Napoleonic Wars - GB vs. France).
I still believe James Macdonald’s thesis in “Free Nation” is largely correct. However, I also note that throughout history, democratic nations have also worked to keep their debt to a minimum. There was hard work during the lulls between crises to reduce and eliminate the debt (See William Pitt the Younger and his idea for a sinking fund). If the United States is not careful, we will drive ourselves so near to bankruptcy, that it will be difficult to access loans in times of dire need. It is then that we may become not a “Free Nation Deep in Debt”, but an enslaved one.