The Social Democracies of Europe were all Oppressive Absolute Monarchies at one Time
What happened in Newtown, Connecticut, was a tragedy. The shooting at Sandy Hook Elementary took 26 lives. Including 20 children. The most innocent of us. Which has ignited a firestorm of debate over guns. The Left blames these deaths on an epidemic of gun violence. Caused by people having access to guns. So the Left wants to have a real debate on gun control. To stop this epidemic of child deaths caused by firearms. By severely restricting access to guns.
Those on the Right, on the other hand, want to protect their Second Amendment right. The right to keep and bear arms. Which allowed the First Amendment. Freedom of speech. The British colonial governors tried hard to clamp down on the anti-British sentiment in their American colonies. And to muzzle that anti-British speech. They sent over British Red Coats to occupy American cities to keep order. And to find and confiscate the Americans’ guns. So the first few amendments of the Bill of Rights (the first 10 amendments) protected free speech. Gave us the power to protect ourselves from future state oppressors. And they even included the Third Amendment. Which states, “No Soldier shall, in time of peace be quartered in any house, without the consent of the Owner, nor in time of war, but in a manner to be prescribed by law.” Again, further protection from state oppression.
The nature of states is to oppress their people. Most have throughout history. Even the social democracies of Europe were all oppressive absolute monarchies at one time. Where kings could do pretty much anything they wanted to. England changed that with representative government. America expanded on these liberties in the New World. And ever since has been very wary of government. Until the Twentieth century. When the growth of government began. Transferring ever more power to the federal government. Everything the Founding Fathers feared would happen without a Bill of Rights.
When it comes to Restricting our Constitutional Rights Liberals Trust Government while Fearing Republicans
Those on the Left say the Constitution is a relic of a different age. That today’s government is a kinder government. A more caring government. One that just wants to take care of the people. By providing generous benefits. Of course this is how some of the worst dictatorships started. Nazi Germany and the USSR both put the people first. Or so they said. Even their names said they were putting the people first. The Nazis were National Socialists. And the USSR was the Union of Soviet Socialist Republics. Socialism is all about taking care of the people. Yet these nations had some the most brutal secret police that terrorized and oppressed their people. For there is no easier way to dictatorial power than championing the people. And once the people stop fearing their government is when the state can take away their guns. To make that oppression easier. The Syrian government is currently having difficulty oppressing their people because they failed to keep guns out of the hands of those they wish to oppress.
If you read a history book you will read a lot about state secret police and state oppression. It’s more the rule than the exception. When you grow up in a free country it’s hard to believe this. And when you’re young you think whatever you know and have experienced is normal. And that things have always been that way. Which is why the younger liberals dismiss talk about the transfer of power to the federal government. While the older conservatives who have seen great change in their lives and know history still fear their government. While the younger liberals grow up believing that government is not to be feared but to be trusted blindly. They even look at what China is doing with their economy with approval. Where the government controls the economy. They like that. Because liberals believe we can always trust a government more than a private corporation. Even if that government oppresses their people. Like they do in China. Where people still deal with famine in the country. Rural workers are paid poorly and live in dormitories in the city factories. And political dissidents are tortured in labor camps where they manufacture goods without pay.
So naïve liberals trust government. Completely. Unless it’s George W. Bush using the Patriot Act. That they fear. But when President Obama uses the Patriot Act liberals ask, “The Patriot what?” When it came to secret wiretaps on people with known ties to terrorists the Left quaked with fear over where these abuses of power would end. But when President Obama starts talking about gun control they haven’t a care in the world. Because when it comes to restricting our constitutional rights liberals trust government while fearing Republicans.
People killed 37 Kids with Guns in 2010 while Partial-Birth Abortions have claimed some 2,000 Lives a Year
President Obama’s former Chief of Staff, Rahm Emanuel, said, “You never want a serious crisis to go to waste.” For the best way to advance an agenda (especially an unpopular agenda) was in the emotional chaos following a serious crisis. Such as the shooting at Sandy Hook Elementary. The majority of Americans oppose gun control. But in that majority are some people that they may be able to convince that some restrictions on the Second Amendment is a good thing in the emotional chaos following Sandy Hook Elementary. Convincing them that guns are causing an epidemic of childhood deaths. That without guns these kids simply wouldn’t be dying. A powerful message during emotional times. But if you remove the emotions and look at some facts you see something different (see 10 Leading Causes of Death, United States by the Centers for Disease Control).
These are deaths by unintentional injury. Looking at the leading causes of death in 2010 (the latest year of data) for children aged 5-14 you see 1,643 deaths. About half (809) of those are from motor vehicle accidents. Drowning came in next at 251 (15.3%). Then fire/burn at 135 (8.2%). Then suffocation at 79 (4.8%). You have to go all the way down to number 7 on the list to get to firearms. Where we can see they killed 37 children in 2010. Or 2.3% of the total number of kids aged 5-14 who died from an unintentional injury. Based on an approximate population of 41 million kids aged 5-14 the total number of kids killed by firearms comes to about 0.00009% of this total. According to the CDC’s numbers, guns aren’t killing a lot of kids. Motor vehicles are. But firearms are not. So taking away our guns will probably not change these numbers much. If at all. So the motive can’t be saving children’s lives. In fact, one can make the argument that there is a greater killer of children out there than anything on the above list. Abortion.
It’s hard to get numbers on abortions. But if you check various sources the number appears to be over a million a year. Wikipedia shows 1,313,000 abortions in 2000. Including 2,232 (about 0.17% of all abortions in 2000) that were partial-birth abortions. Whatever your politics on the abortion issue are one thing regarding partial-birth abortions is clear. These are human lives. For the ‘partial’ part of these abortions requires terminating the life of the fetus while the head is still inside of the mother. For if they terminated the life of the fetus outside of the mother it would be murder according to the law. And you can’t kill something that isn’t alive. In fact, an accidental wrongful death of a pregnant woman often results in two charges of manslaughter. One for the mother. And one for the unborn fetus. Assuming there was no spike in partial-birth abortions in 2000 one can assume that number is representative of all years. Which is far more deaths than by motor vehicle accident let alone from firearms. Yet President Obama wants gun control to save kids lives. When he could save even more by simply revising his stance on partial-birth abortion. Something he argued to keep when a state senator in Illinois.
To encourage Risk Takers to Travel Halfway around the World Mercantile States granted Monopoly Charters
The modern world began because Europeans had a penchant for silk and spices. Something they enjoyed during Roman times. When the Romans ruled the world. And the Mediterranean Sea was nothing more than a Roman lake. But when the empire stopped conquering new lands and sending the spoils of war home they had to turn to other means to pay for the cost of empire. Taxes. To pay for the Roman government and their public spending. And the Roman legions. This excessive government spending led to the fall of the western half of the empire. But the eastern half lived on for another 1,000 years or so. Why? Because the capital of the Byzantine Empire was Constantinople. On the Bosporus. Trade crossroads of the world.
This city was so rich everybody wanted to conquer it. So they could have all those riches. For everything that came along the Silk Road from China crossed into Europe at the Bosporus. Soon Muslims fought Christians in the Holy lands. Then more Christians came. The Crusaders. Those who didn’t die went back to Europe with some of those Chinese luxuries. Spices. Silk. Porcelain. Etc. Sparking a renewed interest in these finer things in Europe. Especially the spices. For European cooking was horribly bland at the time. The Ottoman Turks eventually took Constantinople. Renamed it Istanbul. And controlled that lucrative trade. Making those much sought after Asian goods rather expensive in Europe. Which they had no choice but to pay. Because if you wanted those luxuries you had to go through Istanbul. Until the Portuguese sailed around Africa and found a direct route to those cherished goods, that is.
It was the Commercial Revolution. A new age of international trade. A trade even more profitable than what the Ottoman Turks controlled. Because big ocean-going vessels can carry more cargo than anything coming over land on the Silk Road. And these new European maritime powers wanted that wealth. And the power it would provide. To encourage risk takers to get into those wooden ships and travel halfway around the world they granted monopoly charters. The Dutch East India Company (VOC) was one of the largest. And one of the wealthiest. But this was not your typical company. The VOC established overseas colonies. It waged war. Established treaties. Even coined its own money. Because of this thousands of VOC ships stuffed full of valuable cargoes sailed to Antwerp and Amsterdam, making the Dutch very wealthy. And powerful.
The Tea Act allowed the Company to Ship their Tea Directly to America and exempted them from any Duties
Of course the Dutch weren’t the only ones doing this. They had competition. Portugal. Spain. France. And England. Who would bump into each other numerous times fighting for control of this trade. And those colonies. The English and the Dutch would fight 4 wars. Which is how Dutch-founded Manhattan became part of the British Empire and, subsequently, one of America’s greatest cities. The English East India Company gave the VOC a run for its money. Parliament even passed legislation to give the English a monopoly on all trade with their American colonies. The Navigation Acts. Which stated that all trade to and from America had to be on English ships. And all trade had to go through an English port. Where the ships were unloaded and the cargoes inspected. And taxed. Then they could reload their cargoes and continue on their journey. All tenets of mercantilism. This kept the lower-priced Dutch goods out of America. And prevented the Americans from selling to the Dutch directly for higher prices. So it shut down the Dutch from all American trade (except for a prosperous black market). And brought in some lucrative tax revenue for England. While extending shipping times and increasing prices for the Americans. Which they were not happy about in the least.
The English East India Company (the Company) was similar in structure to the VOC. And soon made the Indian subcontinent a wholly owned subsidiary of the Company. But it wasn’t cheap. Waging war was costly. As was managing those conquered territories (something the Romans had also learned). Then a famine in Bengal in 1770 claimed about one-third of the local population. Making laborers more scarce. And more expensive. All at a time when the sales of their imported goods were falling in Europe. There were warehouses full of unsold Chinese tea that they couldn’t sell. Making for a bad time for the Company.
Higher costs and lower sales spelled trouble. And that’s what the Company had a lot of. Trouble. So the Company turned to Parliament for help. And Parliament helped. By allowing the Company to ship their tea directly to America without having to unload it in a British port. Or pay a duty on that tea. Which would greatly reduce their costs. And allow them to sell it in America cheaper than they did before. So Parliament passed the Tea Act in 1773. Making life better for all involved. But the Tea Act left in place another tax in the previous Townshend Acts. Which was a bigger problem than getting cheaper tea (which they could get on the black market from the Dutch). These taxes on the British subjects in America were unconstitutional. Because there were no Americans sitting in Parliament. This was taxation without representation. A much bigger issue than cheap tea. So they threw that first ‘cheap’ tea into Boston Harbor. The Boston Tea Party being a major step towards war with the mother country. And American independence.
Britain became the Lone Superpower after Abandoning their Protectionist Mercantile Policies and Adopting Free Trade
The American Revolutionary War was not the only headache the British got from their mercantile policies. Part of those policies required maintaining a positive balance of trade. So there was always a net inflow of bullion into the mother country. That’s why raw materials shipped into Britain from America. And finished goods shipped out to America. Finished goods are more valuable than raw materials. So the Americans had to make up for this balance of trade in bullion. Resulting in a net inflow of bullion into the mother country. Very simple. As long as you can manufacture higher valued goods that other people want to buy.
And this is the problem they ran into with the Chinese. For though the British wanted those Chinese spices, silk and porcelain the Chinese didn’t want anything the British manufactured. Which meant Britain had to pay for those luxuries with bullion. Including all that Chinese tea they craved. Which resulted in a net outflow of bullion to the Chinese. The British fixed this problem by finding the one thing that the Chinese people wanted. Indian opium. Grown in Bengal. Of course, this turned a lot of Chinese into opium addicts. The addiction problem was so bad that the Chinese banned opium. But the British were able to smuggle it in. They sold so much of it that they used the proceeds to buy their tea. Thus reversing the bullion flow.
Not the finest hour in the British Empire. The Chinese and the British would go on to fight a couple of wars over this opium trade. The Opium Wars. Which the British did all right in. Even gaining Hong Kong in the bargain. They didn’t build any long-lasting love with the Chinese people. But Hong Kong turned out pretty nice under the British. Especially after they abandoned their protectionist mercantile policies and adopted free trade. Which made the British the lone superpower for about a century as they modernized the world by leading the way in the Industrial Revolution. And the Chinese in Hong Kong were very happy indeed to be there when the communists took over the mainland. And caused a famine or two. For they lived comfortably. In a state founded on mercantilism. That achieved its greatest prosperity during the free trade of capitalism that followed Britain’s mercantile ways.
King Louis XIV remained Catholic as Protestantism was Breaking Out in Europe and Britain
It’s been awhile since the last ice age. In fact the last time we had a real ice age predated the first civilizations. We still wore animal skins and hunted and gathered our food. Long before we first farmed. But it would get cool again. Shortly after the Black Death (during the 1300s) it did get unseasonably cool. So cool that we now call it the Little Ice Age (from 1350 to 1850 or thereabouts). The glaciers didn’t cover Europe. But it was cold. And wet. The spring took forever to change into summer. While summer was quick to turn into fall. Which led to short growing seasons. Poor harvests. Hunger. And famine.
Martin Luther was no fan of the Pope. Especially because of the indulgences he was selling. A shortcut to heaven. For those with money. Which is what the Pope wanted. Money. For he was doing some costly renovations in Rome. So in 1517 Martin Luther nailed up his Ninety-Five Theses to the church door demanding reform. And kicking off the Protestant Reformation. Well, the Catholic Church wasn’t interested in reform. So Luther set up a new church. With a new religion. Protestantism. A more plain religion. With masses in the common language of the people. Instead of Latin. And no fancy things in the church. No altars. No stain glass. No icons. Just the word of God. With over a thousand years of Catholicism already under their belt, though, a lot of people took offense to this. And their offense offended the new Protestants. So they went to war with each other for a few centuries or so over their religious differences.
King Louis XIV was one of the great French monarchs. Under his rule France was the dominant European power. The Sun King believed in the divine right of kings. Absolute monarchism. Doing pretty much as he pleased. Which included a few wars. And growing an empire with oversea colonies. It cost a pretty penny. And a lot of lives. Louis remained Catholic as Protestantism was breaking out in Europe. And in England. For a couple hundred years or so England and France were bitter enemies. Contesting colonial lands throughout the globe. And defending the true faith. Catholicism. Or Protestantism. The Catholic-Protestant battle lines stretched across Europe. And to distant lands across the globe. Including the New World. Where they would both spend fortunes in waging war.
For the French the American War of Independence had nothing to do with the Americans
The Enlightenment, or the Age of Reason, gave the French Voltaire. One of the great Enlightenment philosophers. When Benjamin Franklin was in France the French were eager to bring two of the world’s greatest Enlightenment philosophers together. And did. The French also gave us the great Charles-Louis de Secondat, baron de La Brède et de Montesquieu. The greatest influence on the Founding Fathers as they drafted our Constitution. So there was some great thinking percolating in France. Thoughts that focused on science and reason. Not tradition and faith. Even questioning some long-held beliefs about the Catholic Church, the aristocracy and the absolute monarchy.
Louis XIV built a great French empire. The French seemed invincible. Until Louis XV took over. Who lost the Seven Years’ War to the British. And saw French North America become British. (And the Louisiana Territory go to Spain.) That was tough having their eternal foe humiliate them. The Protestant British. It was a blow to French pride. French commerce. And French finances. The near-perpetual state of war that had existed between Britain and France had cost both nations a lot of money. The British decided to recoup some of that money by taxing their American colonies. Which didn’t go over well with the Americans. For unlike France the British had a constitutional monarchy. Where the Parliament restricted the king’s powers. That great institute of the people. Which the Americans had no representation in. Leading to their rebellion. Because they didn’t like being treated like second-class subjects of the British Empire. Which brought about the American Revolutionary War.
After the Americans defeated a British army at the Battle of Saratoga the French joined the Americans in their fight for independence from the oppression of a constitutional monarchy. Which seemed rather odd being that the French at this time was still an absolute monarchy (though now ruled by Louis XVI). Which was far more oppressive than the constitutional variety. But for the French the American War of Independence had nothing to do with the Americans. It had to do with French interests. It was a chance to strike back at their eternal enemy. The Protestant British. And more importantly, when they won they could get back all their colonies they lost in the Seven Years’ War.
The French were Intoxicated with all of those Enlightenment Ideals and the American Win over an Oppressive Monarchy
The Americans won their independence. But the French didn’t get anything they wanted. All they got was a lot of debt. To add to the enormous pile of debt they already had. One of the French conditions for their alliance was that the Americans would not make a separate peace with the British. Which is what the Americans did. Why? Because the French and the Spanish were conspiring against the Americans during the peace talks. So they could expand their holdings in North America at the expense of the British and the Americans. The French were even willing to trade American Independence away. The British, who would rather have Americans on their former lands than the French or Spanish, made a separate peace with the Americans.
This act of diplomacy stunned the French. For they had assurances from the American Congress that they would take the lead in the peace talks. The Americans double-crossed them before they could double-cross the Americans. This wasn’t supposed to happen in the world of European diplomacy. Especially with rubes like the Americans. But it did. And the French were now in a world of hurt. Broke. And facing bankruptcy. Desperately needing new tax revenue King Louis XVI called an Assembly of Notables. The nobility and clergy. But they didn’t want to pay any more taxes. So the king called the Estates-General of 1789. Which included the clergy, the nobility and everyone else (i.e., the Third Estate).
Meanwhile there was widespread hunger and malnutrition. Poor grain harvests (in part due to the Little Ice Age) pushed the price of bread out of reach for many. People were cold, hungry and poor. In the Third Estate, that is. For though they may have been suffering they saw that the nobility and the Catholic clergy were not. In fact, they were living rather well. Which inflamed the masses. Who became intoxicated with all of those Enlightenment ideals. And that American victory over an oppressive monarchy. It got the people thinking. That they didn’t need a nobility any more. The Catholic Church. Or a king. And the people would get rid of these things. For awhile, at least. With something called the French Revolution.
The Americans and the British have a special relationship. We are BFFs. And are each other’s most important ally. For when there is a dictator to vanquish or a peace to maintain you can count on the Americans and the British. Despite their complicated past. And sometimes conflicting interests. Why, the Americans have a special place in their hearts for two great British leaders of the 20th century. Margaret Thatcher. And Winston Churchill (see Winston Churchill, an all-American hero by Tim Stanley posted 10/31/2013 posted on The Telegraph).
This week, a bust of Britain’s greatest leader was installed at the heart of the Capitol building. So why does the cult of Winston still hold Washington in thrall..?
Americans heard Churchill’s war broadcasts – and it’s this image of resolution and pluck that stayed with them throughout the Second World War, and beyond. After Germany’s defeat, and thrown out of office by Labour’s surprise 1945 election victory, Churchill leant moral leadership to the fight with Soviet Communism. On March 5, 1946, he gave a speech before 40,000 at the small town of Fulton, Missouri, in which he declared: “From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent.” This was the rhetorical starting gun for the Cold War. The simplest reason why Churchill is so popular in the US is that he was an ally in three global wars.
Why are Americans in love Winston Churchill? Perhaps I can best answer that question in song.
In case you didn’t make out the lines in the last verse they are included here.
Others will respect you
Others will elect you
They’ll accept your calls
Others will desire you
They may not admire you
But they will admit
You do transmit
When others wanted to appease the Nazis Churchill didn’t. When others wanted to embrace the Soviet Union Churchill didn’t. When others wanted to give up essential liberty to obtain a little temporary safety he chose essential liberties. This is why Americans love Winston Churchill. We respect him. And he transmited balls. Unlike some of our world leaders today.
Before the Americans declared their independence from Great Britain they tried to reconcile their differences with Great Britain. For many believed Great Britain had the greatest form of government in the world. A constitutional monarchy. The form of government that vaulted the British Empire into a superpower. And gave her people more rights and liberties than any nation in the world.
The Americans, rather, the British Americans, were proud to be British. And would have remained proud members of the British Crown had it not been for the immense cost of the Seven Years’ War. That the Parliament tried to pay for by taxing the American colonists. For all the British Crown did to protect the Americans from the French and their Indian allies. Not asking for much, really. But the British taxpayers in Great Britain had representation in Parliament. And had a say in that taxation. But the British living in North America were not given that British right. Which was the source of all the friction between the British Americans and Great Britain. And what brought them to war.
Some of the fighting in the American Revolutionary War was brutal. But the worst of it was between Patriot and Loyalist. American against American. In the civil war that raged in the South. Which is why the United States and Great Britain resumed relations following the war. There had plenty of issues but the post-war relationship was far better than any other nation that fought a civil war. Why? Because there is a Special Relationship between the British and the Americans. We come from the same stock. We share the same values. And traditions. The countries around the world that were once part of the British Empire are some of the most advanced nations in the world. And their people have some of the greatest rights and liberties in the world today. All because of our British past.
We may never bow to British Royalty again. Because of our history. But we can embrace the Royal Family. Just as the British do. For it is their tradition. And a deep part of their glorious history. As it is ours. So we welcome the future king into the world. We wish the best for him and the Royal Family. And the British people. Joining them in spirit when they shout God Save the King (see America’s embrace of the Royal Family demonstrates the enduring strength of the Special Relationship by Nile Gardiner posted 7/23/2013 on The Telegraph).
Despite the lukewarm and often insulting approach of the Obama administration towards Britain over the past four and a half years, the Special Relationship between the United States and Great Britain remains extraordinarily strong in terms of defence, intelligence, cultural and trade ties, and is uniquely important to the American people. No other nation in the world holds a place in American hearts as special as Great Britain. And Americans hold an overwhelmingly positive view of the British Royal Family. The most recent poll conducted in the United States on the British Monarchy – a CBS/New York Times poll back in April 2011 – showed that 71 percent of Americans believe the Royal family “is a good thing” for the British people, with only 15 percent against. In the same poll, the Queen held a 61 percent approval rating, at the time about 15 points higher than that of the US president.
There are defeatists who argue that Britain hardly matters anymore to the world’s superpower, and that the UK can only maintain influence in Washington through the lens of the EU. The huge US interest today in events thousands of miles away in London, and the tremendous support for the Royal Family suggests that the Special Relationship is far from dead. With good reason Americans admire the British for their uncompromising defence of tradition, their warrior spirit, and their willingness to uphold national sovereignty.
Britain matters. And if the Eurozone collapsed as well as the EU they will matter more. Thanks to Margaret Thatcher. Who reversed their slide into Socialism. Unlike other European nations. And of late, the United States. Sadly.
President Obama insults our greatest friend and ally because Britain bucks the socializing of Europe. Britain is often the lone rational voice in the European Parliament. Currently that voice belongs to Daniel Hannan. Who knows the history of Britain. The United States. And our Special Relationship. Which is conservative. Not liberal. Which is why the Special Relationship is anathema to a liberal like President Obama.
God save the future king. The queen. The United States of America. And our Special Relationship.
Done Right Cowboy Coffee is one of the Finest Cups of Coffee you will ever Have
The British love their tea. They love it so much they call lunch ‘tea’ in Britain. Their world stops when it’s time for tea. As they place a kettle of boiled water, cups on saucers, milk, sugar and lemon on a tray and bring it in to a warm gathering of friends and colleagues. Then prim and proper British gentlemen and ladies prepare their tea. Sit with good posture. And sip their tea with pinky extended.
The British brought their treasured tea to the New World. And British Americans continued the tradition. Until the Boston Tea Party and the Revolutionary War. And the War of 1812. Interrupting the British-controlled tea trade. It was these events and a general dislike of all things British during those turbulent times that changed American tea drinkers into coffee drinkers. Something we didn’t have to do with such dainty British manners. As Americans were not quite as prim and proper. Or refined. Americans were more rough and tumble. As epitomized by the American cowboy. (Caution: The following clip from Mel Brooks’ Blazing Saddles has crude and sophomoric humor featuring cowboys breaking wind.)
Not quite the refined British tea. Note the beverage they were drinking. Hanging on the tripod over the campfire is a large coffee pot. Where these cowboys make ‘cowboy coffee’. Course coffee grounds go into the coffee pot. Fill with water. Place over campfire. Heat water to just below a boil. Carefully pour out coffee without stirring up coffee grounds from the bottom of the pot. Enjoy. Done right and it will be one of the finest cups of coffee you will ever have. And something that really hits the spot on the trail after a long hard day. Though not as refined as British tea it is just as comforting.
A Common Complaint about Coffee Percolators was that they made Bitter Coffee
Cowboy coffee can be delicious. Or it can be horrible. For temperature and brew time are critical in making coffee. As well as the proportion of coffee grounds to water. The proper temperature to brew coffee is between 195 and 205 degrees Fahrenheit. This will release the oils from the coffee beans. But if the temperature reaches boiling the coffee will be bitter. So for good cowboy coffee you needed to put in just the right amount of ground coffee beans with just the right amount of water. And keep the water just below the boiling point. And once the coffee brewed you needed to drink it. For sitting on the heat too long will just evaporate the water away leaving a strong, bitter, muddy water.
Around the time of the American Civil War we started using coffee percolators. Where instead of placing ground coffee beans in a pot of water we dripped water through a basket that contained the ground coffee beans above the water. In the center of this basket was a tube that went from the bottom of the percolator to the top. We placed this percolator onto the stove. This heated the water. As the temperature rose the water expanded. The water in the narrow tube expanded so much in that small tube that it pushed all the way up and out at the top of the tube. And dripped onto the top of the coffee grounds. Dripped through them. And out the bottom into the heated water below.
This cycle continued over and over until the water in the pot started getting darker. The top of the pot, above the tube, was a glass knob. Which we could see through. And observe the color of the water percolating up from the bottom of the pot. When it turned to the appropriate ‘coffee color’ we removed the percolator form the stove. And served the brewed coffee. Using a stove, though, made it easy to boil the water. Which would make the coffee bitter. A common complaint about percolators. As well as some coffee grounds that passed through the basket into the pot. And poured into our cup. But some preferred the full robust flavor percolating gave. Even if it was bitter from overheating the water.
A Quality Electric Drip Coffee Maker can pour 195-205 Degree Water over Coffee Grounds in under 8 Minutes
Thanks to Nikola Tesla and his AC power Americans soon had electricity in their homes. And a whole sort of electric appliances to use with that electricity. Including an electric coffee percolator. Which reduced the chances of boiling the water by controlling the temperature of the water. There was a temperature sensor that shut off the heating element if the water temperate approached boiling. When the temperature fell below the optimum temperature range (195-205 degrees Fahrenheit) the temperature sensor turned the heating element back on. Making it easier to make a good cup of coffee in the home. Until the Seventies came around. And the electric drip coffee maker.
The electric drip coffee maker is a staple of most American kitchens today. It is now the way we make coffee at home. By heating water to an appropriate temperature and dripping that heated water through a coffee filter full of ground coffee beans. Once brewed the coffee drips into a carafe. Which sits on a warming plate. Unlike the percolator which sent brewed coffee back through the basket holding the coffee grounds over and over again. The electric drip coffee maker has a reservoir of cold water. At the bottom of this reservoir is a tube with a check-valve. Which allows water to flow only one way through the valve. Past this check-valve is a horseshoe-shaped metal tube. Attached to this metal tube is a heating element. Past this metal tube is a hose that runs up to the top of the coffee maker. And out through a spray-head onto the coffee grounds.
As the heating element heats the water in the metal tube it expands. Because it can’t go back into the reservoir thanks to that check-valve the water rises up the tube and out through the spray-head. As the water moves up the tube the siphon it creates pulls water from the reservoir through the check-valve into the metal tube. When it heats and expands it rises up the tube to the drip-head. And this cycle repeats again and again until the water reservoir is empty. A temperature sensor turns the heating element on and off to maintain the proper water temperature. Like the electric coffee percolator. But the addition of a coffee filter prevents any grounds from ending up in our cup. Also, a well-designed drip coffee maker can pour this properly heated water over the coffee grounds in under 8 minutes. Another key to making an excellent cup of coffee. Other advances include a timer. Allowing us to set up the drip coffee maker the night before so we can have a freshly brewed cup of coffee first thing in the morning. So we can grab a cup on the way out the door. American style. In a hurry. Unlike the British. Who stop the world when it’s time for tea.
African Slaves came to the New World because the Colonists needed Laborers
The Europeans didn’t invent slavery when they introduced it to the New World. It’d been around since the dawn of civilization. And it’s been a way of life in many civilizations for thousands of years. Where no one was safe from the slave traders. Some were born into slavery. Some were simply soldiers captured in battle. Even children were bought and sold. Perhaps the saddest story is the Children’s Crusade of 1212. When about 50,000 poor Christian kids walked from Central Europe to free Palestine from Muslim control and return it to the Christians. They got as far as boarding ships in Italian ports. But those ships did not deliver them to Palestine. They delivered them instead into the Muslim slave markets of Northern Africa and the Middle East. Where they were never heard from again.
African slaves came to the New World because the colonists needed laborers. They tried enslaving the Native Americans. But it was too easy for them to escape back into friendly territory. And blend in with the indigenous population. Not the case with black Africans. Who didn’t know the surrounding country. Or the languages. What they knew was an ocean away. Also, the locals had a tendency of dying from European diseases. Especially smallpox. Whereas the Africans were long exposed to smallpox. And built up some resistance to this scourge of European colonialism.
So the New World colonies began with slaves harvesting their crops. Slaves that the Europeans bought from African slave traders. Who had long been selling captured Africans to the Arabs. And had no problem selling them to the Europeans. And so began the problem of slavery in America.
With the Cotton Gin Separating the Seed from the Cotton Fiber became not so Labor Intensive
When the British American colonists started talking about liberty the slavery problem was the elephant in the room that they were reluctant to talk about. When Jefferson wrote that all men were created equal they knew that meant those enslaved against their will, too. Yet here they were. These liberty-seeking people were enslaving people themselves. But there was a problem. To form a united country the Founding Fathers needed the southern states. Who used slaves as the basis for their economy. And they weren’t going to join a union without their slaves. So they wouldn’t talk about the elephant. Instead they tabled that discussion for 20 years. With the population growing they didn’t need slaves anymore. There were few in the North. And the South should follow suit. It was inevitable. Leaving just one problem to solve. What to do with their slaves as they transitioned to paid laborers. Which the Founding Fathers were sure the southern slave owners could solve within those 20 years.
Slave-labor was not efficient. George Washington wanted to sell his slaves and replace them with paid laborers. Because paid laborers cost less. You only paid them for their labors. And then they went away. And if you changed your crops you could easily hire new laborers skilled in the new crop. Not quite so easy with a large slave labor force. So those in the North had good reason to believe that slavery would slowly give way to paid laborers. Even in the South. Or so they thought. But one of the staple crops of the South started to shape events. Cotton.
Cotton was a labor-intensive crop to harvest. And separating the seed from the cotton was even more labor-intensive. Until someone mechanized this process. With a cotton engine. The cotton gin. Patented in America by Eli Whitney. A hand-cranked device that used hooks to pull the cotton fiber through a screen. The holes in the screen were small enough to let the cotton fiber through. But not large enough for the seeds to pass. With the cotton gin separating the seed from the cotton fiber became not so labor intensive. In fact, these little machines could clean cotton faster than the slaves could harvest it. Which meant, of course, there was a lot more cotton that could be grown and harvested. Which created a new slavery boom. And dashed all the hopes of the Founding Fathers.
Cheap Cloth Unleashed a lot of Economic Activity which Improved the Quality of Life
Many blame the cotton gin for extending the institution of slavery in America. And the bloody American Civil War that ended it. But apart from this the cotton gin was a fundamental step in modernizing economies everywhere. And helped to spur the textile industry forward. By creating an abundant source of material for weaving looms everywhere.
The textile industry was important because everyone wore clothes. And we made clothes from cloth. Once upon a time people made their own clothes. Or spent a lot of money for store-bought clothes. Leaving them with little time or money for other things. So cheap cloth unleashed a lot of economic activity. Which improved the quality of life. The Chinese started this process. By giving us an advanced loom that used foot-power to lift thread. And the spinning wheel to make yarn. All the weavers needed were abundant sources of fiber to feed these machines. Such as American cotton.
The Chinese also made some beautiful silk tapestries with complex patterns. Which were very difficult to reproduce by hand in the West. Until the French automated this process. When Joseph Marie Jacquard improved on the works of Basile Bouchon, Jean Baptiste Falcon and Jacques Vaucanson. And created the Jacquard loom. This automated the pattern process coming from those Chinese looms. By using punch cards to automatically lift the proper threads to reproduce that complex pattern. An impressive advance. But one that did not impress the French. Who were busier with revolution than fancy weaved patterns. But the British were interested. And they used the Jacquard loom in their booming textile industry. Fed largely by that abundant American cotton. Until the American Civil War, at least.
An Advanced Automated and Mechanized Economy has no Room for Slavery
The British also used this punch card idea to automate their shipbuilding industry. To speed up the riveting process. By automating riveting machines. To make ships that carried immigrants to the new world. Who swelled the American population. Making the census taking more and more complex. And another punch card system made counting these people simpler. The tabulator. Where an operator punched holes in a card to represent information for each person. Age. Marital status. Country of origin. Etc. IBM would use this idea of punching information into a card later. To program some of the first computers. Machines that increased efficiencies further. By replacing ever more people with machines.
So it is an interesting turn of events. Eli Whitney created the cotton gin in America. A machine that was part of a series of technological developments that increased efficiencies and reduced the number of workers needed to perform once labor intensive tasks. All during this process fewer people were able to do more things. Except one thing. Planting and harvesting cotton. That would take first a civil war. And then steam-powered farming equipment. To automate farming. Which came later to the South than it did in the slavery-free North. And other parts of the world.
Life got better for everyone the more advanced the economy became. Sure, a lot of people lost jobs. But that’s progress. A few lost jobs is a small price to pay when the masses can enjoy a better life. Thanks to automation and mechanization. And that includes slaves. Or, rather, former slaves. For an advanced automated and mechanized economy has no room for slavery.
Because of Advances in Farming Fewer People could Grow more Food
Cold weather kills people. A lot of people throughout history have died during winters as they exhausted their food supplies. That’s why preparing for the winter was serious business. You had to store enough food to carry you through the winter. And if the fall harvests were poor it spelled big trouble. And famine. It’s hard to imagine what this was like. A long winter ahead of you with an insufficient food supply. It was scary. For it meant some people would die before the spring came. Hard to fathom this in a day where you can actually drive your car through a blizzard to your favorite greasy diner or fast food restaurant for a delicious hot meal to take off the chill of the coldest winter day. It wasn’t always like this.
And it wasn’t only long winters that killed people. Sometimes the long summers did. Where there were insufficient rains. And drought. That destroyed crops and drastically reduced fall harvests. You don’t hear much about famine these days in the U.S, Canada, Britain, France, Germany or other advanced nations. But underdeveloped and impoverished nations suffer famine to this day. Why? Two primary reasons. Improved crop yields. And improved transportation. The advanced nations have them. The impoverished nations don’t.
Improved crop yields create food surpluses. Key to civilization itself. Food surpluses allowed a middle class to arise because everyone did not have to grow food. Because of advances in farming fewer people could grow more food. Those who didn’t have to grow food could think about other things. Including ways to further improve crop yields. By creating better tools. Better techniques. Better food storage. And when you do all of these things you not only have enough food for yourself and for your surplus you have enough to export. To those who do not have enough food. Even allowing people to live in areas that cannot produce food. For they can trade for food. Thanks to these surpluses available for export.
Food is so Plentiful and Inexpensive Today that the Problem in America is not Famine but Obesity
Early farms relied on the fertile soil of river banks. The spring flooding of the rivers raised river levels. When the water retreated it left behind fertile soil. Eventually we learned how to take control of our water resources. And used it to make fertile land away from river banks. Using irrigation. Bringing the water to the land. Probably the next great development was the plow. Which let us take control of the land. We tilled the soil to aerate it. To control weeds. To mix in organic material. Such as manure. To prepare it for planting. And we used irrigation to bring those crops to harvest.
We then developed crop rotation to replenish nitrogen in the soil. And to control pests. Certain pests attack certain crops. By rotating crops pest infestation couldn’t spread and return year after year. Families of crops need certain nutrients. Rotation prevents the depletion of any single nutrient. Then we took control of the plants we grew. By creating new plants. Cultivars. Using selective breeding to increase grain size, the number of grains per plant, improve disease resistance, etc.
Then we turned to chemistry. Creating fertilizers. And pesticides. These two advancements alone exploded crop yields. Never before did so few grow so much with so little. We maximized the agricultural potential of land year after year. And then we mechanized the farm. Introducing the tractor. Allowing the same number of farmers to cultivate more land. So not only did their existing lands yield more they added more high-yield lands to explode yields. Creating huge food surpluses available for export. And slashing the price of food across the board. From the bread we make from wheat. To corn-fed beef. Food is so plentiful and inexpensive today that the problem in America is not famine but obesity. Obesity is bad but it takes a lot longer to die from obesity than it does from famine. And we enjoy all of those delicious things that are making us so fat. While there’s nothing to enjoy when starving to death.
We were able to Raise Crop Yields to such High Levels we have Food Available for Everyone in this World
As crop yields increased more food entered the market. Good for people. But bad for farmers. Because they depressed crop prices. Large farms that cultivated more land could still make a profit. But the small farmer who didn’t cultivate more land just saw his revenue fall. Until his revenue fell below his costs. Leaving him unable to service the debt he incurred to mechanize his farm. Causing bankruptcy. Which happened a lot in the Thirties. Causing all those bank runs during the Great Depression.
To fight this free fall in crop prices countries enacted tariffs and import restrictions. The British Corn Laws kept out the less expensive foreign food so the landowning aristocracy could maximize their profits. And when the British repealed the Corn Laws and adopted free trade everything the landowning aristocracy feared happen. Food became inexpensive and plentiful. In large part because of the United States. Who was maximizing their crop yields. And then using the railroad to ship their surpluses to the great rivers. The Ohio. The Missouri. The Mississippi. Where they loaded these surpluses onto steamships. Where it traveled down the Mississippi to the Port of New Orleans. Where they transferred it to ocean-going sail ships and steamers. Bound for Europe. And Britain. Where this food fed hungry people. And cut into the profits of the wealthy landowners.
But it wasn’t only in the United States. Soon other great agricultural countries produced food surpluses that they shipped all over the world. Winters still happen. Droughts still happen. But they don’t happen everywhere at the same time. And because we were able to raise crop yields to such high levels we have food available for everyone in the world. And truck, rail and ships can move that food anywhere it is needed. Which is why we can drive to our favorite greasy diner or fast food restaurant during a blizzard on the coldest day of winter and enjoy a fresh glass of orange juice, coffee, eggs, hash browns and sausage. No matter where you live. As long as you live in a country that supports free trade.
As Muslim displaced Christians from the Lands of the Roman Empire Sugar moved West
There is a war on sugar. It’s making us fat. And it’s making us sick. Because it tastes so damn good. We crave it. And always have. Since the first days we chewed on sugarcane. Sucking out the juice. Which was where that sweet delight was. It was so good that the people in New Guinea (just north of Australia) learned how to plant it and raise it themselves. Instead of just looking for it in the wild. Around the eighth millennium BC. From there it spread. North. To Southeast Asia. Southern China. And into India. Where they took sugar to the next level. They didn’t just chew on sugarcane to suck out the juice in India. They refined it into a crystallized substance. Around 350 AD. Concentrating that sweetness. And making it portable. Then the Arabs entered the picture.
The Arabs took the Indian sugar-making technique and made it into big business. They established plantations to grow it in tropical climes. Where the two things that made sugarcane grow best—heat and water—were plentiful. They built the first sugar mills to refine the cane. Basically presses to squeeze out the juice. Which they then boiled the water out of. Leaving behind sugar crystals. And added it to their foods. As Muslim Arabs displaced Christians from the lands of the Roman Empire sugar moved west. The Arabs introduced sugarcane plantations as far west as southern Spain. When Christian Crusaders returned from fighting Muslims in the Holy Land they brought back crystallized sugar to Europe. And they quickly fell in love with those white crystals. By the late 13th century even England had grown a sweet-tooth. Who would go on to consume so much of the stuff that they would rot their teeth away.
Then the Europeans entered the sugar business in the 15th century. At first it was just the wealthy that enjoyed sugar. Then it spread to the common people. As demand grew they established new plantations to meet that demand. In southern Spain. The Atlantic island of Madeira. The Canary Islands. The Cape Verde islands off the west coast of Africa. All had good growing climates for sugarcane. And each plantation had its own processing plant. For a ship’s hold full of crystallized sugar was far more valuable than a ship’s hold full of harvested sugarcane. Making these plantations labor intensive endeavors. And working the fields was backbreaking work. To step up production required a larger labor force than was available. And to meet that demand they turned to using African slaves.
Sugar was a Turning Point from an Agrarian World of Slaves and Indentured Servants to the Modern Industrial World
By the 16th century the Europeans were taking sugarcane across the Atlantic. And African slaves. The Portuguese, Spanish, Dutch, French and British brought sugarcane and slaves to Brazil, Cuba, Jamaica, Barbados, the Virgin Islands, Guadaloupe, Saint-Domingue (present day Haiti) and elsewhere in the Americas. With the Caribbean Islands becoming the sugar capital of the world. France’s Saint-Domingue being the single largest producer in the world. Until their slave uprising. It was France’s wealthiest possession in the Western Hemisphere. And its loss changed French ambition in the New World. For Napoleon had his eyes on rebuilding the French Empire in North America that was so rudely interrupted by France’s loss in the Seven Years’ War. But with the loss of Saint-Domingue and all that sugar wealth Napoleon lost all interest in the New World. And sold the Louisiana Territory to the United States. To prepare for war with Britain. Again.
The British and the French both had lucrative sugar plantations in the West Indies. When the American Revolutionary War turned into a world war the British and French squared off once again. Especially in the West Indies. Where they wanted to protect their possessions producing that valuable sugar. And take the other’s possessions. So they could expand their holdings. And their wealth from the sugar trade. As well as put down any slave uprisings. Such as would later happen in Saint-Domingue. Some say the reason the British lost the American Revolutionary War was because they diverted too much of their military resources to the Caribbean. But the French were diverting a lot of their military resources to the Caribbean, too. Which is one reason why the war lasted 8 years. As the French were more interested in taking the British possessions in the West Indies than American independence. Their first efforts fighting alongside the Americans (Rhode Island in 1778. Savannah, Georgia, in 1779) did not help the cause. It was only when the French fleet could be spared from the action in the West Indies that they joined General Washington in trapping General Cornwallis at Yorktown in 1781. With Cornwallis’ surrender effectively ending the war. Even though they wouldn’t sign the final peace treaty until 1783.
By the end of the international slave trade Europeans sent approximately 10 million Africans to the New World. Mostly to Brazil and the Caribbean. To work in the sugar plantations. Where slave ships left Africa. They unloaded slaves in the New World. Loaded the sugar these slaves grew. Shipped the sugar back to the Old World. Unloaded the sugar and loaded on finished goods. Then sailed back to the African slave stations. Where they traded their finished goods for more slaves. There was big money in The Trade Triangle (trade from Africa to the New World to the Old World and back to Africa). But sugar also helped to kick off the Industrial Revolution. For the iron industry grew to make the machinery of the sugar mills. As each plantation processed their sugarcane into crystallized sugar that was a lot of cast iron gears, sprockets, levers, axles, boilers, etc. Basically a turning point from an agrarian world of slaves and indentured servants. To the modern industrial world and wage-earners.
There is a Correlation between America’s Obesity Problem and the Switch from Cane Sugar to Corn Sugar
By the 19th century technology was making better sugar at lower costs. The British designed a low-pressure boiler. As water boils at a lower temperature when at lower pressure they were able to refine sugar with less energy. Cutting production costs. And waste. As higher temperatures caramelized some of the sugar. Though caramelized sugar can be delicious on crème brûlée you don’t want it when you’re producing crystallized sugar to sell. Then the Americans improved this process by creating the multiple-effect evaporator. A multi-stage device where the pressure is lower in each successive stage. They use steam to boil water in the first stage. This vapor then provides the energy to boil water in the next stage. Which is at a lower pressure. And, therefore, has a lower boiling point. That vapor then boils water in the next stage which is at a lower pressure. And so on. Where one energy input creates a lot of useful work cost-efficiently.
With the advance in refining equipment refinery plants grew more complex. And expensive. So instead of building one on every plantation they built fewer but larger ones. And shipped raw product to them. Modern ships and economies of scale made this the new business model. Companies grew and opened other refineries. And expanded vertically. Growing sugarcane as well as refining it. One of the best at this was the American Sugar Refining Company. That at one point controlled 98% of the sugar processing capacity in the United States. Which earned it a spot on the original Dow Dozen. The first 12 industrial stocks the Dow used in calculating their Dow Jones Industrial Average in 1896. And remained a component of the Dow Jones Industrial Average until 1930.
Eventually the Americans couldn’t compete with foreign sugar producers any more. They enlisted the help of Congress to impose tariffs on cane sugar imports. Forcing Americans to pay more for their sugar. Then they started making sugar out of government subsidized corn. High-fructose corn syrup. Which pretty much sweetens anything manufactured in the United States today. That some say causes more health problems than cane sugar. Including obesity. Those in the high-fructose corn syrup business vehemently deny this. But there is a correlation between America’s obesity problem and the switch from cane sugar to corn sugar. Because of the different way the body metabolized corn sugar it did not satiate our appetite. Leading us to over consume. Such as with sugary drinks. Which have gotten so large in size that New York City Mayor Bloomberg tried to make these large sizes illegal. Because America’s over consumption of sugar was making us obese. While Britain’s over consumption of cane sugar only rotted their teeth away. It didn’t make them obese. Which makes the case that corn sugar is less healthy than cane sugar. Despite what the corn sugar lobby says.
Congress printed so much Money that the Continental Dollar became Worthless
The American Revolutionary War lasted eight years. And eight years of war ain’t cheap. It took money to buy arms. It took money to buy uniforms. It took money to pay soldiers. And paying for these for eight years required a lot of money. Which the Americans didn’t have. They were at war with Great Britain. Who was their major trading partner. And pretty much their only trading partner. As the Americans were a British colony in the days of mercantilism. Which meant the Americans sent raw materials to the mother country. On British ships. Through British ports. Britain then transformed those raw materials into finished goods. And exported them. On British ships. Through British ports. Throughout the world. And back to America. Before the Revolution, that is.
Thankfully for the Americans there was a nation that hated the British. And had been in a near perpetual state of war with them since about forever. And they had just recently lost their North American territories to the British. Which they wanted back. So the French had other interests than American Independence. But American Independence was a good opportunity to settle the score with their old nemesis. And when the Americans defeated a British Army at Saratoga the French thought that just maybe the Americans could pull this off. And if so they wanted to be in on the spoils of a British defeat.
So the French financed a large part of the American Revolutionary War. But it wasn’t enough. The Continental Army was poorly fed and poorly clothed. Even leaving bloody footprints in the snow as the Continental Congress couldn’t put boots on their feet. Nor could they pay them. So they turned to printing money. Unleashing a brutal inflation. No one wanted the currency. The inflation was so bad that it lost its value before they could spend it. So no one wanted to accept the Continental paper dollar. Giving rise to the expression ‘not worth a Continental’. Everything had two prices. A low price if you paid with hard currency (gold and silver coins). And a very high price if you paid in Continental dollars. They printed so much money that the money became worthless. So the Continental Army just took what they needed from the people to keep their men from starving to death. Leaving the people with an IOU. That Congress would redeem one day. Maybe.
The Percentage of Tax Receipts going to Pay the Interest on the Debt has fallen as the Federal Debt Rose
Today hard currency is a thing of the past. It’s pure un-backed paper these days. This paper money has no intrinsic value. And you can’t exchange it for gold or silver that does. But you sure can print it. Well, the government can. And they do. They borrow and print money like there’s no tomorrow. Allowing them to spend money they don’t have easier than ever before. And it’s not just for feeding and clothing our soldiers. But just about everything under the sun. Causing the federal debt to soar.
Think of the growing federal debt like a credit card with a growing balance. And these balances grow fast because each month they charge you interest on your past purchases. And on your past interest charges. Which is why if you let that credit card balance get too high it’ll grow beyond your ability to pay it off. A lot of people who do find themselves filing a personal bankruptcy. Because the interest charges just balloon their monthly payment. With the interest in their credit cards consuming an ever larger portion of their paycheck. As should the interest on the federal debt consume an ever larger portion of federal tax receipts.
Interestingly, the percentage of federal tax receipts going to pay the interest on the debt has in general fallen as the federal debt rose. Odd. The more debt one has the greater the interest one pays. That’s how it works on our credit cards. When the debt was approximately $6.2 trillion in 1991 the percentage of total tax receipts going to pay the interest on the debt was 27.1%. But when the debt soared to $16.1 trillion in 2012 the percentage of tax receipts going to the interest on the debt fell to 15%. The federal debt grew to be 2.6 times what it was in 1991. Yet it appears we are paying less interest in 2012 than in 1991. Something doesn’t seem right.
Interest Rates will Rise as the Purchasing Power of the Dollar Falls, Raising Prices and the Cost of Borrowing
A couple of things could explain this. And the first thing that comes to mind is tax revenue. The reason why interest on the debt as a percentage of tax receipts has fallen while the federal debt grew is, perhaps, that tax revenues grew even greater. So even though interest on the debt could be soaring along with the soaring federal debt the government could be awash in tax revenue. And if the number you’re dividing by is larger than the number you’re dividing into it than you get a smaller percentage. Simple arithmetic. The driver of the federal debt is the annual deficits. So let’s compare interest on the debt to the deficit. To see if the interest on the debt rises with the deficit.
And it doesn’t. In fact, the interest on the debt almost held constant when the deficit plunged into a surplus. And when the deficit soared to a record high. It seems like there was some other factor involved here. Something actually keeping the interest on the debt down. Even when the deficit soared after 2007. What could do this? Well, there is only one other thing to look at. Interest rates.
And we have our answer. Interest on the debt has not kept pace with the debt because of bad monetary policy. Keynesian economic policies introduced permanent inflation into the economy. The Keynesians in government kept interest rates artificially low to stimulate economic activity. Those low interest rates stimulated so much economic activity in the Nineties that it created a dot-com bubble. And when it burst it created a painful recession in the early 2000s. Also, President Clinton’s Policy Statement on Discrimination in Lending lowered lending standards in the Nineties setting the stage for a great housing bubble that burst into the subprime mortgage crisis in 2007. And the Great Recession.
The Keynesians have been increasing the money supply (i.e., printing money) in a desperate attempt to pull the economy out of recession. Which is why the market yield on a 10-year treasury has fallen as the deficit soared in the early 2000s. And fell even more as the deficit soared even further after 2007. With the yield falling to as low as 1.8% in 2012. Even though the demand for so much borrowing should have raised interest rates. Which would have happened had the government not been increasing the money supply.
And this is why interest on the debt as a percentage of receipts has fallen. Despite record debt. Some may look at this and think it’s a good thing. As it lets the government borrow more money. So they can give us more stuff. But printing money causes inflation. Which has been kept at bay for now thanks in large part to the Eurozone sovereign debt crisis. As investors everywhere are desperate to find a safe harbor for their money during these uncertain times. But that won’t last forever. Eventually those interest rates will rise as the purchasing power of the dollar falls. Raising prices. And the cost of borrowing. A lot. Because of that record debt. And when they start selling new treasuries at higher interest rates than the ones they’re replacing a very large portion of our tax receipts will go to pay the interest on the debt. Just like when people charge too much on their credit cards. Pushing the country closer to bankruptcy. Just like people with overextended credit cards. And like countries in the Eurozone.