Monday, December 30, 2013

From The 'We've Been Here Before' Vault-Second Edition

'Peabody here. You Americans should really
start learning your history!'
We love reading history, particularly accounts of consequential people who made momentous decisions and took courageous actions to let us live in a country as great as the United States of America.

From the Founding Brothers/Fathers, whatever you want to call them, such as Thomas Jefferson, James Madison and George Washington, to the ancient philosophers and leaders of Greece and Rome, we find their stories much more interesting than fiction for some reason.

Probably because what they did and said were 'true'. In many cases, what they did and said were far more 'unbelievable' than any novel we have ever tried to read and finish.

But one of the main reasons why we find history so interesting is this: We are doomed to repeat it.

Steve Turner, a favorite of one of our good friends in Washington, DC, Steven Garber, who runs the great Washington Institute in Falls Church, Virginia once said this about history:

"History repeats itself. Has to. No one listens." 
Sad, but true, isn't it?

Think of all the things mankind could have avoided had we just read the history of past fiascoes caused by hubris, egotism, megalomania and plain old human stupidity. The list is almost too long to imagine.

We have recently been reading the great biography, 'Alexander Hamilton' by Ron Chernow and heartily recommend it for you to read in the new year. Not only will it give you a fresh appreciation for the genius who was Alexander Hamilton, it will also give you a fresh appreciation for what even the most ardent advocate of a 'energetic executive' in the White House believed about the role of the federal government in our daily lives.

Namely, that it was set up to protect us from foreign invasion, promote free and uninterrupted commerce and bind us together as a nation of connected states, not a loose confederation of independent mini-nations within the confines of state borders as it was under the ineffectual Articles of  Confederation.

And....that was about it. Hamilton believed there were certain essential functions that could only be achieved by a strong national government. In no way could he or any other Founder have foreseen or even dreamed of a sprawling, purportedly omniscient and all powerful central government operating out of Washington, DC that now controls roughly 23% of our national GDP output each year and makes so many rules and regulations that there is not one single person in this country who can tell you what they all are.

'That looks positively like a top-heavy monarchical government!' they would marvel out of both sides of their mouths.

That all being said, we do find some comfort in the fact that history does repeat itself and that America somehow someway has found its way out of terrible situations in the past, many far, far more damaging to the nation and individuals alike than anything we have seen in the last 5 years. The Civil War; The Great Depression, WWII just to name a few.

Here's just one item we picked up while reading the Alexander Hamilton book by Mr. Chernow, just 1 of perhaps hundreds that have made our eyes bug out and say: 'No way that could have happened way back then in 1787; 1789; 1790 or 1796!'  

These accounts of verified history have made us appreciate the sacrifices and courage of the people who started our country and in particular, the genius of the people such as Mr. Hamilton, Mr. Madison and Mr. Jefferson who made it possible for us to live in the nation we live in today, good and bad, warts and all:

I. Care to guess what the percentage of the federal budget was for servicing the national debt in 1794, roughly 13 years after the cessation of hostilities in the Revolutionary War? The current payment of interest to service the national debt is roughly 6% of the federal budget.

Answer: 55%. 55% of the annual budget in 1794 was dedicated solely to servicing the federal debt.

That would be equivalent to close to $2 trillion being spent today on interest alone out of our $3.6 trillion federal budget. 

Don't laugh and say: 'That will never happen in America!' If interest rates returned to just what we consider historically 'normal', say to 5-6%, interest payments would soar to over $1 trillion...overnight. Just like that. 6% of $17 trillion national debt = $1.02 trillion in interest costs per year. 

Wait til our debt hits $22 trillion by will happen, no matter what we do in the next 3 years under President Obama.

Maybe we really should take heed of what the esteemed President Washington and Mr. Hamilton said over 200 years ago about the dangers of debt:

'(President) Washington (in 1794) had recently asked Congress for plans to retire the public debt and 'prevent that progressive accumulation of debt which must ultimately endanger all government'.*

'The debt of France brought about her revolution. Financial embarrassments led to those steps which led to the overthrow of the government and to all the terrible scenes (public beheadings at the guillotines) which have followed.'-Alexander Hamilton*

The difference between the great leaders we had in the past and the ones we have today is they actually had plans to deal with such tough issues as retiring the national debt. Hamilton, on his last legs before he retired as Treasury Secretary, submitted the Report on A Plan for the Further Support of Public Credit to the US Congress to extinguish the national debt within 30 years.

Today, we have no plan to 'extinguish' anything: the national debt; wasteful spending; obsolete federal programs; entitlement payments to super uber-wealthy people...nothing.

Isn't it about time we elect some leaders who will produce such plans?

Wouldn't the new year of 2014 be a good time to start by replacing all of the incumbents who have failed to do, well, ANYTHING productive on the issues that really matter to us as Americans?

* from Alexander Hamilton by Ron Chernow, p.480

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