White House Burning (eBook)

Simon Johnson, James Kwak (Autoren)

eBook Download: EPUB

2012 | 1. Auflage
368 Seiten
Knopf Doubleday Publishing Group (Verlag)
978-0-307-90712-7 (ISBN)

Infos

America is mired in debt--more than $30,000 for every man, woman, and child. Bitter fighting over deficits, taxes, and spending bedevils Washington, D.C., even as partisan gridlock has brought the government to the brink of default. Yet the more politicians on both sides of the aisle rant and the citizenry fumes, the more things seem to remain the same.
In White House Burning, Simon Johnson and James Kwak--authors of the national best seller 13 Bankers and cofounders of The Baseline Scenario, a widely cited blog on economics and public policy--demystify the national debt, explaining whence it came and, even more important, what it means to you and to future generations. They tell the story of the Founding Fathers' divisive struggles over taxes and spending. They chart the rise of the almighty dollar, which makes it easy for the United States to borrow money. They account for the debasement of our political system in the 1980s and 1990s, which produced today's dysfunctional and impotent Congress. And they show how, if we persist on our current course, the national debt will harm ordinary Americans by reducing the number of jobs, lowering living standards, increasing inequality, and forcing a sudden and drastic reduction in the government services we now take for granted.
But Johnson and Kwak also provide a clear and compelling vision for how our debt crisis can be solved while strengthening our economy and preserving the essential functions of government. They debunk the myth that such crucial programs as Social Security and Medicare must be slashed to the bone. White House Burning looks squarely at the burgeoning national debt and proposes to defuse its threat to our wellbeing without forcing struggling middle-class families and the elderly into poverty.
Carefully researched and informed by the same compelling storytelling and lucid analysis as 13 Bankers, White House Burning is an invaluable guide to the central political and economic issue of our time. It is certain to provoke vigorous debate.

From the Hardcover edition.

Textauszug

Nothing is more important in the face of a war than cutting taxes.
--House majority leader Tom DeLay, 2003

On June 1, 1812, President James Madison sent a letter to Congress asking it to consider a declaration of war against Great Britain. The Democratic-Republican majority in Congress was happy to oblige. For the original War Hawks, only military force could avenge repeated British infringements on American sovereignty--'the spectacle of injuries and indignities which have been heaped on our country,' in Madison's words. The insults to the United States ranged from seizing American ships on the high seas and impressing their sailors into the Royal Navy to supporting Native American attacks along the Western frontier. Attempts to apply economic pressure had backfired, and diplomacy appeared to be leading nowhere, as Madison said, 'Our moderation and conciliation have had no other effect than to encourage perseverance and to enlarge pretensions.'

With war approaching, it fell to Treasury Secretary Albert Gallatin to pay for it. Gallatin hoped to finance the war with borrowed money, but he wanted to raise taxes enough to cover the interest on new debt. Without those taxes, he worried that bond investors would not be willing to lend large amounts of money to a young country fighting with a European superpower. But the War Hawks were ideologically and politically opposed to taxes--particularly the excise (internal trade) taxes that Gallatin wanted to impose. As the party of small government, the Democratic-Republicans believed that higher tax revenues constituted a threat to individuals' and states' rights. Perhaps more importantly, they feared that raising taxes to fight a war could hurt them at the ballot box. Congress did increase some tariffs (taxes on external trade) in the run up to war, but failed to approve the internal taxes that Gallatin had pressed for, instead authorizing the Treasury Department to borrow money. But there were not enough investors willing to lend the amount needed, even before war began, forcing the government to print paper money. On June 18, 1812, the United States declared war against Great Britain. Less than a month later, Congress adjourned.

Hampered by Congress's reluctance to raise taxes, the Treasury Department struggled to pay for soldiers in the field and ships at sea. In 1813, with the government only weeks away from running out of money, Gallatin was forced to rely on Philadelphia banker Stephen Girard to underwrite a massive loan--because, at that point, Girard's credit was better than the government's. The United States military could win individual victories, but was unable to achieve any of its major objectives, suffering repeated defeats on the border with Canada, even with Great Britain distracted by the much larger war against Napoleon in Europe. Congress finally agreed to impose excise taxes in 1813, but it was too late to build up a world-class military. After a decade of tight budgets, the U.S. Navy began the war with all of seventeen ships. The Royal Navy commanded over one thousand ships, even with many of them committed elsewhere, it was still able to blockade the Eastern shoreline and raid the coast almost at will. Chesapeake Bay, the broad waterway leading to both Washington and Baltimore, was defended by a collection of barges and gunboats that were outclassed by the British navy and soon trapped in the Patuxent River. The approach to Washington along the Potomac River was guarded by Fort Warburton, completed in 1809, about ten miles downstream from the capital. But when Pierre Charles L'Enfant, the architect and city planner who had designed the city of Washington, inspected the fort, he...

Produkt-Details

• Erscheint lt. Verlag: 3.4.2012
• Sprache: englisch
• Themenwelt: Recht / Steuern ► Wirtschaftsrecht
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Finanzierung
• Themenwelt: Betriebswirtschaft / Management ► Spezielle Betriebswirtschaftslehre ► Bankbetriebslehre
• Themenwelt: Wirtschaft ► Volkswirtschaftslehre
• ISBN-10: 0-307-90712-0 / 0307907120
• ISBN-13: 978-0-307-90712-7 / 9780307907127