The Evolution of a National Burden – Part 4/7

The federal debt did not start with Presidents Ronald Reagan, H. G. W. Bush, G. W. Bush or Barrack Obama. The federal debt started in 1790 when the first Treasury Secretary, Alexander Hamilton, stabilized the dollar and refunded the debts incurred by the states fighting the Revolutionary War (1775 – 1783).

  • America’s first war cost $101 Million (equal to $2.52 Billion in 2012). The first federal debt caused by the revolution was 35% of GDP or $75.4 million ($1.885 Billion in 2012).
  • The War of 1812 (ended 1815) cost $90 million ($1.6 Billion in 2012).

By 1834, nineteen years later, the debt from America’s first two wars had been paid down to $33.7 thousand (equal to $886,984 in 2012).

  • Next came the Mexican War (1846 – 1849), and it cost $71 Million ($2.08 Billion in 2012).
  • The Civil War (1861 – 1865) pushed the federal debt to $3.2 Billion ($45 Billion in 2012).
  • The Spanish American War (1898-1899) cost $283 Million ($9 Billion in 2012)
  • The Philippine-American War also known as the Philippine War of Independence (1899-1902). During the suppression of this war of independence against the US, 200,000 to 1.5 million Filipino civilians were killed; there were 12,000 – 20,000 Philippine military casualties, and 4,165 US military dead. The US would not grant independence to the Philippine state until 1946. The cost of this war was $600 million (equal to $15.8 Billion in 2012)

To pay off debt and fund the growing pains of a nation becoming an expanding global empire, Congress passed the 16th Amendment to the Constitution on February 3, 1913 establishing Congress’s right to impose a Federal income tax.

Note: The Inflation calculator used  for this series of posts may be found at Dave Manuel.com, and the primary source for government spending was US Government Spending.com

Continued on December 6, 2012 in The Evolution of a National Burden – Part 5 or return to Part 3

Also discover Each President’s share of the US National Debt and learn more from the National Debt Info-Graphic by President 1945 – 2012

_______________________

Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of The Concubine Saga.

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

To follow this Blog via E-mail see upper left-hand column and click on “FOLLOW!”

The Evolution of a National Burden – Part 1/7

There is no easy way to explain the evolution of the US National Debt.  It is a complex issue and considering that most Americans have a short attention span and the average adult reads at a fifth-grade level, not many will take the time to read the posts in this series let alone understand them.

Instead, most will continue to believe the simple false claims and exaggerations that the national debt comes from social welfare spending and that there are a lot of nonworking deadbeats in the US living off of working tax payers.

Mitt Romney’s infamous comment that 47% of Americans are Obama voters that “pay no tax” in addition to his second infamous comment that even alienated fellow Republicans when he said Obama won the election with free gifts (such as health care and a plan for partial forgiveness of college loan interest) to Blacks, Hispanics and young voters reinforced what many Americans already believe—that there is a large number of Americans that live off welfare.

However, the facts and history tell another story. In fact, the US was born in debt and every war added to the debt until the Reagan era (1981-1989) when “Government receipts flattened thanks in part to the large, permanent tax cuts that served as one of the top accomplishments of President Ronald Reagan’s first term (I’m not sure we can call this an accomplishment—it may be more of a disaster). Spending jumped on both defense and social programs. Deficits exploded, breaking with the US tradition of only running large deficits during wartime. (proof that most if not all federal deficit spending before 1981 was a result of fighting wars)” Source: The Atlantic.com

How much was added to the national debt from wars after 1981 is anyone’s guess: First Gulf War 1991 (cost the US $24 Billion); Afghanistan 2001 to present (cost the US $589 Billion so far), and Iraq 2003-2011 (cost the US $809 Billion so far)—these three wars have cost the US $1.422 Trillion (and counting) without adding the annual Interest.

Before President Reagan for thirty-six years (1945 – 1981), the US paid for defense and social welfare programs while reducing the national debt (compared to GDP) inherited from fighting World War II (compared to GDP, which means the economy grew faster than the national debt but the debt did continue to grow slowly).

In 1980, before Reagan, military defense spending was $134 Billion. In addition, the US fought the Korean (1950 – 53) and Vietnam (1955 – 75) Wars. When Reagan left office in 1989, military defense spending had increased to $303.6 Billion (his last annual budget)—an increase of 226.5 percent without fighting any wars.

In contrast, welfare spending in 1981 (not counting Social Security, unemployment or workers compensation because these programs are funded by specific taxes and trust funds), Reagan’s first year as president, was $44 Billion and by 1989 it grew to $67 Billion—an increase of 65.6% by the end of his second term.

Comparing military defense to welfare spending during the Reagan era: welfare spending was $488.3 Billion for an average of $54.2 Billion annually. Military defense spending was $2.4 Trillion for an annual average of $287.5 Billion.

Please explain how welfare spending is responsible for the $1.5 Trillion Reagan deficit.

Recently, the Senate Budget Committee requested from the nonpartisan Congressional Research Service (CRS) an overview of federal welfare spending in the US and the results of that report said, “Welfare spending was the largest item in the federal budget.”

However, what this report listed as welfare, may surprise you, because most of it is not the sort of welfare defined as deadbeats refusing to work.

For a few examples, in 2011, there was the Emergency Food and Shelter Program that cost the federal government $121 million, or The Free/Reduced School Breakfast Program for Children from families living in poverty that cost $2.987 Billion in addition to The National Free/Reduced School Lunch Program that costs another $9.83 Billion.

In addition, federal pensions (another part of the federal budget not listed as welfare) lists spending at $775.6 Billion for 2011 making it sound as if retired federal workers are making a lot of money.

But, pay attention please, $730.8 Billion of that total was Social Security, a program funded by a Social Security tax paid for by working Americans and employers. That leaves $44.8 Billion to pay pensions to retired federal workers.

Is it possible that welfare critics want working Americans to think of Social Security and retirement programs as welfare?

Note: The Inflation calculator used  for this series of posts may be found at Dave Manuel.com, and the primary source for government spending was US Government Spending.com

Continued on December 3, 2012 in The Evolution of a National Burden – Part 2

Also discover Each President’s share of the US National Debt and learn more from the National Debt Info-Graphic by President 1945 – 2012

_______________________

Lloyd Lofthouse, a former U.S. Marine and Vietnam Veteran, is the award winning author of The Concubine Saga.

His latest novel is Running with the Enemy. Blamed for a crime he did not commit while serving in Vietnam, his country considers him a traitor. Ethan Card is a loyal U.S. Marine desperate to prove his innocence or he will never go home again.

And the woman he loves and wants to save was trained to hate and kill Americans.

To follow this Blog via E-mail see upper left-hand column and click on “FOLLOW!”