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Confronting The National Debt

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Our infrastructure continues to crumble -- roads, bridges, dams, underground water and waste conduits, etc., most lacking systematic repair and replacement strategies. We have been at war continuously for more than a decade and war looms anew in Iran, while our forces are still engaged in Afghanistan. Our military garrisons spanning the globe continue to drain resources needed elsewhere, while we have yet to pay for the earlier wars spanning our history. Despite extensive social programs, beginning in the early 20 th Century, 7.1 million Americans are either in jail or under some form of state and federal correctional supervision. Those are merely the most easily identifiable contributors to the national debt -- owed at a rate of more than $136,000 per taxpayer.

Generations of Americans have listened to the endless blather of political candidates from all parties claiming to be fiscally conservative; however intellectually or socially liberal they are or are not. However, there hasn't been a fiscally conservative Congress or administration working for the economic well-being of the nation since 1957, the last year federal spending showed a real decline. That year the national debt inched back over a two-year period from $274.4 billion in 1955 to $270.5 billion.

It remains a common misperception that the debt declined during the Clinton administration, when what really declined, albeit briefly, was the U.S. budget.

It is a plain fact that both parties have spent profligately for the last 99 years to create our $15.4 trillion monster debt that continues to grow as wildly as the deadliest cancer. For a quick perspective, and ignoring inflation for the moment, the national debt that precipitated the 1913 income tax is less than two ten-thousandths -- 0.00019 --the size of today's national debt, according to U.S. Department of Treasury figures. Who in the 63 rd Congress would have foreseen that? Who in the 112 th Congress is even aware of it?

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Apparently it is both the Republican and Democratic position that government growth and spending must not be stopped and reduced. The notion of a debt ceiling has become as laughable as it is tragic. Why pretend to have one to begin with? Most recently the ceiling was raised from $15.2 trillion to $16.4 trillion. "Over the last two years, we've increased discretionary spending by 24 percent -- 84 percent if you include the stimulus monies," Former House Appropriations Subcommittee on Homeland Security Chairman Harold Rogers (R-KY) told the committee on March 2, 2011. "We're borrowing 42 cents on every dollar we spend." While that line has been repeated ad nauseam in congressional testimony and media interviews, it has had little effect on the lawmakers' borrowing habits.

Aristotle in his Ethics defined "the liberal man" as "the one who spends in proportion to his means." By that definition liberals have been a rarity in American politics since 1835 despite the overwhelming control of Congress by Democrats in the last century.

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Debt managed and nearly paid off

The birth of the United States was an expensive proposition. In fact, the nation's formation and the establishment of a new government resulted in a national debt of $75.5 million at the beginning of 1791. However, a succession of able presidents and congresses reduced that by more than 40 percent to $45.2 million prior to the onset of the War of 1812 against England. In the walk-up to that war -- unlike as in many of our most recent wars --considerable thought was given in advance about how to pay for the conflict. "A loan bill for eleven millions at six per cent was easily passed," wrote historian Henry Adams in the 1880s, "but all the force of the war feeling could not overcome the antipathy to taxation," which was not seriously considered as an option for the war's funding.

The war ended in 1815, and as of Jan. 1, 1816, it had contributed to pushing the national debt to new heights, this time $127.3 million. Again, however, a succession of fiscally responsible presidents and congresses worked industriously for the common wealth and without the aid of an income tax. They reduced the national debt in 18 of the following 19 years, and consecutively for 13 years -- the longest debt reduction streak in U.S. history -- so that by 1835, they paid down the national debt to $33,733.05, its lowest point ever.

The cost of war

However, after the prosperity of the 1820s and 1830s, tight management of the budget and the debt began to unravel. The debt rose and fell, but mostly rose -- and precipitously so with the 1847-1848 war with Mexico. Prior to the Mexican war, the national debt in 1846 stood at $15.6 million. In the first year of the war, 1847, it more than doubled to $38.8 million. The war ended the following year, and by Jan. 1, 1849, the debt had quadrupled to $63.1 million.

The most dramatic change in the debt occurred during the American Civil War when the debt exploded from a mere $64.8 million in 1860 to $2.8 billion in by July 1, 1866 -- a 42.8-fold increase. There the debt hovered for the next 46 years despite 21 years in which the Treasury Department shows a reduction.

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It's a coin toss over which war marked the point of no return on a pay-down of the national debt and fiscal responsibility. (In fact, because it was never fully paid off, some portion of the current debt stems from the unpaid portion of the 1776 revolution.)

The income tax

Congress imposed an income tax for the first time in U.S. history during the American Civil War. Initially it was a tax of three percent on incomes above $800 per year. Congress increased it in 1862 and 1865, when incomes between $600 and $5,000 were taxed at five percent and incomes of $5,000 and above were taxed at 10 percent. Before the tax was abolished in 1872, it had raised an impressive $347 million. The income tax was attempted again in 1894, but the Supreme Court in Pollock v. Farmers' Loan and Trust Company in 1895 declared the two-percent tax on incomes over $4,000 to be unconstitutional.

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David Alan Coia is a freelance writer and editor based in Arlington, VA.
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