We were for the most part a debtor nation before we were a nation. Many of our founding fathers including George Washington were heavily in debt to British banks and merchants before the Revolution. If Ben Franklin had not been able to secure loans from France to continue the Revolutionary War it is likely we would be a constitutional monarchy as is Canada. And our currency would look even stranger than it does.
Alexander Hamilton battled Jefferson and Madison for the ability of the Federal government to assume the debt incurred by the States during the course of the Revolutionary War. Had he not won the battle the nation without a doubt would have dissolved. The price for his victory? The location of Washington DC. Good job Alexander. Oh by the way George Washington benefited from a bit of land speculation due to the selection of the location of the Capitol. God bless our sacred Founding Fathers. They clearly were saint like!
Lincoln relied on loans from wealthy individuals and corporations to partially fund the war effort. He put up with Salmon Chase, who was an enormous pain in the ass and a wacko, as Secretary of the Treasury because Chase was able to convince individuals and corporations to buy very risky bonds, another word for loaning money, from the Federal government enabling it to continue to prosecute the Civil War. If not for these measures the Civil War might have gone very different and it is very likely we would be a very fractured and weak people with a significantly reduced quality of life and security.
The Reagan and Bush Two administrations very substantially increased the national debt. Clinton's administration substantially decreased the nationally debt. So much for the myth that Republicans are fiscally conservative. Current Republican passion about reducing the national debt is firmly based on political considerations and has nothing to do with economic reality. Dare I say that are hypocrites to the nth degree.
If China and the rest of the world wants to loan us incredible amounts of money at substantially below rational, at least to us, market rates, God bless them. It has a direct impact on my incredibly low house mortgage. They do it because of the stability of our form of government, current bullshit put to the side, ensures that they will get paid back. One way to look at our national debt is that it is a benefit due to our ability as a nation to keep our heads screwed on straight for more than two centuries. If you don't like what is going on in our country go live in Pakistan for a few months and check back with me.
Bush Two's administrations due to his initiating a war in order to enhance his chance of reelection and cutting taxes while dramatically increasing the size of government escalate the national debt at a rate never seen before. Obama's first term due to inheriting the deepest recession in history due to Bush stuffing his banking buddies pockets with money and fighting two wars saw an increase in the national debt. Thus far in his second term the rate of increase of our national debt is steadily decreasing. The point is, does the level of debt really matter? After two hundred years it would seem not.
Yes it is a show. Yes to a certain extent it is a fake. Yes what goes on within the beltway often resembles theater. And yes there are hacks like Boehner who could not get a job pumping gas in his home town who has been videotaped passing out campaign checks from the tobacco industry to congressmen on the floor of the house minutes before a key vote on tobacco legislation. But it is government for, by and of the people. Many of those who serve are good, smart, dedicated people who are determined to do the best they can for our nation. And it is a government that has stood the test of time. We are a nation to which the world looks for guidance and leadership. That speaks to our strengths and our values.
Finally if you don't like what is going on, get involved. Campaign, contribute, vote and run for office. Yes, these things do make a difference!
For all its warts our system of government seems to work pretty well. I for one am damn proud to be an American and feel very blessed to be able to live here.
DISCLOSURE: The above rant was liberally fueled by wine.
Dare I get back on topic, Freddie's piece in the NYT was extremely well done!