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To: Brilliant
The Founders were actually in default....

That sounds like a good debate topic; but I find it easier to believe the idea that when the question came up, the decision was to reject default.  The central government chose a bona fide timely bond redemption.

13 posted on 07/07/2005 5:58:17 AM PDT by expat_panama
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To: expat_panama

I agree that it depends on how you define default. But there were a lot of creditors of the government at the time, and they weren't getting paid in a timely manner.

Utlimately, they decided to sell off some of the western lands to pay the debts. At the time the Constitution was amended to allow the income tax, the NYT ran an editorial in which it touted the income tax as the solution to the federal government's financial problems. It described the federal government as in a perpetual state of bankruptcy.

It worked for a while, but eventually, the Peter Principle (is that the right one?) caught up: Every budget expands to absorb all available funds.


15 posted on 07/07/2005 6:18:20 AM PDT by Brilliant
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