Posted on 01/08/2021 9:49:44 AM PST by zeugma
On January 8, 1835, President Andrew Jackson achieves his goal of entirely paying off the United States’ national debt. It was the only time in U.S. history that the national debt stood at zero, and it precipitated one of the worst financial crises in American history.
The elimination of the national debt was both a personal issue for Jackson and the culmination of a political project as old as the nation itself. Since the time of the Revolution, American politicians had argued over the wisdom of the nation carrying debt. After independence, the federal government agreed to take on individual states’ war debts as part of the unification of the former colonies. Federalists, those who favored a stronger central government, established a national bank and argued that debt could be a useful way of fueling the new country’s economy. Their opponents, most notably Thomas Jefferson, felt that these policies favored Northeastern elites at the expense of rural Americans and saw the debt as a source of national shame.
Jackson’s triumph contained the seeds of the economy’s undoing. The selling-off of federal lands had led to a real estate bubble, and the destruction of the national bank led to reckless spending and borrowing. Combined with other elements of Jackson’s fiscal policy as well as downturns in foreign economies, these problems led to the Panic of 1837. A bank run and the subsequent depression tanked the U.S. economy and forced the federal government to begin borrowing again.
The U.S. has been in debt ever since. The debt skyrocketed during the Civil War but was nearly paid off by the early 20th Century, only to balloon again with the onset of World War I. Numerous presidents and politicians have decried the debt and even pledged to do away with it, with conservatives and libertarians frequently echoing Jackson. Nevertheless, with the debt now surpassing $22 trillion, it is unlikely that the events of 1835 will be repeated in the foreseeable future.
For those interested, I have a bunch of historical data that I have put together on my personal web page. Click here if you're interested. Note: I maintain this and other stuff on my site for my own personal enjoyment. I don't have so much as a cookie on it. Enjoy!
Here is the relevant chart from my site:
If you look at the chart for the entire history of the Republic, the debt numbers during that period are too washed out to be useful...
Might as well zero out the current number since it will NEVER be paid back. Besides, ain’t everything gonna be ‘fwee’ starting 1/21/2021?
Biddle and his Den of Vipers, we call them the fed today
Put a fake nose on either they both look like a witch.
...but which weighs more than a duck?
I wish President Trump had made debt reduction part of the deal.
However, taking arrows for ‘We The People’ on a daily basis will have to be enough for now. :(
Each Taxpayer ‘owes’ $222,000.00+ as of today.
Can’t hardly WAIT to see what the NEXT four years brings as we ‘Build Back Better’ from our most prosperous years in DECADES!
*Rolleyes*
I’m sure the ‘republicans’ will once again start making noises about how bad the debt is, now that they have no power whatsoever to do anything about it.
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As I’ve gotten older (and gained a better understanding of modern, central banking), I’ve come to realize that the only danger is inflation. Contemporary knowledge of how to deal with inflation is good, so it’s really not an issue. Thank about it, we’ve had historically low interest rates for ages and yet prices have been held in check by a struggling economy. During Obama’s tenure, the Fed had interest rates effectively at 0 and we still had low inflation (of course we had low growth too, but that’s a different issue).
We should not let Republicans use this talking point in the future. Individual financial responsibility and productive behavior? Fine. Being misers when the average American citizen is hurting badly? Not fine. What McConnell did in his recent stunt was inexcusable.
Is defaulting an option?
And one result of such a large debt, bring interest rates to savers close to zero. Earning interest at say 5% on an insured bank CD was I think an important part of retirement income for many people until quantative easing.
There is no reward for saving anymore. I believe we are seeing negative interest rates in Europe.
That is currently being referred to as the "Great Reset". It's been discussed by folks like Catherine Fitt and Nigel Farage.
I'd have to agree with your assessment that inflation is a relatively 'small' problem. I see it as a hidden thief. Your average bloke doesn't generate the kinds of savings/investments that it takes to actually get ahead of inflation. Even the creeping 'low' inflation that we're currently experiencing, (I'd argue that the official rates are fantasy), will eat into the ability of folks who are not politically connected to get ahead of the curve.
The ponzi scheme known as 'social security' is a good example. For years I've been bumping right up against the limit beyond which social security taxes go away. Every time I get close, the limit is raised. Kinda frustrating IMO.
Hmmm! I wonder if I could do that with Chase and Citi! “Sorry guys we’re gonna have to do a reset.” Probably not.
That's what I get for not proofing.
Hyperinflation is a possibility, but a remote one. Governments that allow it to happen are on their way out. The creators of our current system know that.
Now, that doesn’t mean that abuse still won’t happen, but our economics understand that production lies at the heart of curing inflation (not just reducing or curtailing the money supply). That’s why we’ve been adding money to our Money Supply for generations and have had only slow growths in inflation for most of our history. Yes, prices have risen over the history of our country, but incomes have generally risen at a higher rate.
When incomes don’t broadly rise faster than inflation....well...people start to get pissed. ;)
And when asked, what did say his greatest accomplishment was?
“I killed the bank”. Today it is called the federal reserve.
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