The Evolution of a National Burden – Part 5/7

The 16th Amendment was not the first time there was an American income tax. The financial requirements of the Civil War prompted the first American income tax in 1861. At first, Congress placed a flat 3-percent tax on all incomes over $800 and later modified this principle to include a graduated tax.

Congress repealed the income tax in 1872, but the concept as a source for funds did not go away.

In 1894, as part of a high tariff bill, Congress enacted a 2-percent tax on income over $4,000. The tax was almost immediately struck down by a five-to-four decision of the Supreme Court, even though the Court had upheld the constitutionality of the Civil War tax as recently as 1881.

In addition, Democratic Party Platforms under the leadership of three-time Presidential candidate William Jennings Bryan (1860 – 1925), however, consistently included an income tax plank, and the progressive wing of the Republican Party also supported the concept.

In 1909, progressives in Congress again attached a provision for an income tax to a tariff bill. Conservatives, hoping to kill the idea for good, proposed a constitutional amendment enacting such a tax; they believed an amendment would never receive ratification by three-fourths of the states. Much to their surprise, the amendment was ratified by one state legislature after another, and on February 25, 1913, with the certification by Secretary of State Philander C. Knox, the 16th amendment took effect. Source: Our

  • Then came World War I (1917 – 1921) that cost $20 billion (equal to $256.4 Billion in 2012)

By 1920, the federal debt was $22 billion (equal to $253 Billion in 2012). It would take ten years to pay that debt down to $16.2 billion ($221.92 Billion in 2012).

  • Next was World War II and the national debt grew to $43 billion by 1940. In 1950, after defeating Nazi Germany and Imperial Japan in 1945, the national debt was $257.4 Billion (equal to $2.451 Trillion in 2012).
  • The Marshall Plan to rebuild Europe after World War II cost the US $13 Billion (equal to $112 Billion in 2012). The Marshall Plan money was in the form of grants that did not have to be repaid.  The total of American grants and loans to the world, 1945-53, came to $44.3 Billion (equal to $381.9 Billion in 2012).
  • The Korean War (1951-1953) cost $30 Billion ($273.6 Billion in 2012). In 1953, the National Debt was $275.2 Billion.
  • The cost of the Vietnam War (1959-1975) was $111 Billion ($743 Billion in 2012). In 1975, the National Debt reached $576.6 Billion
  • The Persian Gulf War (1990-1991) cost $61 Billion ($102 Billion in 2012). By 1990, the National Debt reached $3.233 Trillion
  • The Iraq War (2003 to 2012) cost $715 Billion ($784 Billion in 2012 dollars) and still growing.
  • The war in Afghanistan has cost $583.3 Billion to November 10, 2012 and it isn’t over yet.

After World War II, the National Debt was reduced from 120% to 30% of GDP by 1981 when President Carter (1977 – 1981) left the White House. During that thirty-six year period (1945 – 1981), welfare spending in the US, including unemployment and workers compensation funded by taxes paid by workers and/or employers, cost $509.8 Billion and the federal government funded wars in Korea and Vietnam but still reduced the National Debt.

I repeat: under seven US presidents, Truman, Eisenhower, Kennedy, LBJ, Nixon, Ford and Carter, the National Debt was reduced from 120% (1945 at the end of World War II) of Gross Domestic Product to 30% of GDP by 1981.

Then Ronald Reagan was elected president.

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

Continued on December 7, 2012 in The Evolution of a National Burden – Part 6 or return to Part 4

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!”

Wars and Unbridled Capitalism Cause National Bankruptcies—not socialist policies!

John, in a comment at Right, said, “Point I can’t get a liberal to answer … give me one example where socialist policies have not eventually driven that country into bankruptcy.”

My answer was China.  However, when I attempted to leave a longer comment with more evidence with linked citations, this right-wing political site seems to have limited the number of words one may use in a comment.

What I have discovered over time is that most far-right conservatives spout opinions supported by emotion and malarkey.  To respond to these emotional rants usually requires longer comments and/or posts.  It is easy to claim anything without facts and much more difficult and time consuming to respond with logic and facts to reveal the truth.

After a few days, it occurred to me that there must be a history of countries going bankrupt and the reasons that led to those financial collapses, so I used Google.

First, I found a list of ten countries that went bankrupt at Bill, but could not find one on the list that failed due to socialist policies. In fact, the evidence indicates that the primary reason a country goes bankrupt is usually unbridled, unrestricted capitalism and greed.

When the private sector is given too much freedom from government oversight to make money, greed and risk taking overrules common sense.

From I learned that in 2001, Argentina’s bankruptcy was caused by a run on its banks followed by a collapse of the country’s national currency.

In 2008, Iceland was a casualty of America’s 2007 global financial crisis. The value of Iceland’s currency dropped so low that it wasn’t worth enough to pay for imports on which the country is heavily dependent.

Another reason for countries going bankrupt is too many expensive wars. Germany went bankrupt in 1920 and 1945 as a result of losing World War I and World War II.

In addition, Great Britain faced bankruptcy in 1945 as a result of fighting World War II. So ravaged was the British economy following the war that almost all national resources were dedicated to paying war debts for five full years after its completion. On another site, I learned that the last payment on that World War II debt was made in 2008.

That caused me to consider that the US has spent more than $40 Trillion on defense since the end of World War II but less than $10 Trillion on socialist welfare programs, and America funded the wars in Iraq and Afghanistan with borrowed money.

Such stories are sobering reminders that national bankruptcy is very real, and has happened repeatedly throughout history to nations that fail to take proper precautions. The origin of socialist policies started with the French Revolution of 1789. Then the Communist Manifesto was written by Karl Marx and Friedrich Engels in 1848. In the last third of the 19th century, social democratic parties emerged in Europe and started to push socialist policies.

In fact, Common reports that the three happiest countries in the world for quality of life are Social Democracies: Denmark, Finland and the Netherlands, ranked 1st, 2nd and 3rd, respectively. Two other Social Democracies ranked 6th and 8th: Canada and New Zealand. The U.S. didn’t make the top 10 list.

However Spain went bankrupt seven times in the 19th century. In addition, France has become insolvent eight times between 1500 and 1800. Ecuador has gone bankrupt six times since 1830.

From another site, I learned more details about why a few of these countries went bankrupt.

Futurist says, “In Argentina’s case in 2001, wealthy people took their money and fled the country. Over $40 billion left the country in one single night. This resulted in a run on the banks, followed by a collapse of the country’s national currency. Argentina’s citizens were so desperate, many panicked that many spent nights sleeping in front of the automated teller machines.

“Iceland, a tiny country with just under 320,000 residents, was the first domino to fall in the 2008 global financial meltdown, when its banks defaulted on $85 billion.

“Iceland was hit harder by the crisis than many other countries because of its inflated banking system. In just five years, the banks went from being almost entirely domestic lenders to major international financial intermediaries.

“Unbeknownst to most of the population, the country basically turned itself into a massive hedge fund. The whole nation was caught up in a web of deception.

“Spain, once one of Europe’s economic superstars, rose to the top largely through real estate speculation and its growing assimilation with the rest of the EU.”

Again, socialist policies are not mentioned as the cause of these bankruptcies. Instead, it seems that the cause is unbridled, unrestricted capitalism—the same policies the GOP promoted in 1999 that led to the 2007 global financial crises, and the same policies that brought on The Great Depression of 1929.

Historically, wars and unbridled capitalism causes national bankruptcies—not socialist policies, not yet anyway. In fact, socialist policies are a way to avoid rebellions such as the French, Russian and Chinese rebellions and civil wars. With socialist policies, we avoid the poor from suffering to the point of an uprising due to suffering and anger.

The United States could learn from history to avoid a national bankruptcy. For example: Republican President Herbert Hoover refused to use socialist policies during the Great Depression. “(He) did not think the federal government should offer relief to the poverty-stricken population. (Instead, he focused) on a trickle-down economic program to help finance businesses and banks” … When Hoover asked the CEO’s of large private sector businesses and banks to help the unemployed and poor, he met resistance, because the private sector believed the way to solve the Great Depression was to fire workers. “Hoover was widely ridiculed: an empty pocket turned inside out was called a “Hoover flag;” the decrepit shantytowns springing up around the country were called “Hoovervilles.” Source:

Studies have estimated that thanks to Herbert Hoover refusing to use socialist policies to feed the unemployed/poor that more than seven-million Americans died of starvation during the Great Depression. Source:

Today, thanks to socialist policies known as welfare, few starve to death in the US. The cost to feed unemployed and poor Americans for 2012 was $113.5 billion. The average monthly food stamp benefit per participant in the US is $133.84. The budget for unemployment is $109 billion. The cost of Defense is $902 billion. Source: US Government and State Health

The national average for unemployment benefits in the US was $293 per week according to the MSN Money website. That’s 35 percent of an average salary in America reports USA Today. Then Bloomberg reported that almost 2,400 millionaires collected unemployment benefits of the 11.3 million Americans that collected unemployment in 2009.

Lloyd Lofthouse is a former U.S. Marine and Vietnam Veteran,
who taught in the public schools for thirty years (1975 – 2005).

His third book is Crazy is Normal, a classroom exposé, a memoir. “Lofthouse presents us with grungy classrooms, kids who don’t want to be in school, and the consequences of growing up in a hardscrabble world. While some parents support his efforts, many sabotage them—and isolated administrators make the work of Lofthouse and his peers even more difficult.” – Bruce Reeves

2014 Florida Book Festial and Comment by Writers Digest JudgeLOW RES Biographies and Autobiographies for the 2014 Southern California Book Festival

2014 London Book Festival

Lofthouse’s first novel was the award winning historical fiction My Splendid Concubine [3rd edition]. His second novel was the award winning thriller Running with the Enemy. His short story A Night at the “Well of Purity” was named a finalist of the 2007 Chicago Literary Awards. His wife is Anchee Min, the international, best-selling, award winning author of Red Azalea, a New York Times Notable Book of the Year (1992).

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

Twisting History for Fun and Profit — maybe?

Yahoo Movieland! ran an interesting piece about Historically Inaccurate Movies (historical fiction), and the liberties Hollywood takes with historical fiction movies is amazing.  To learn what that deliberate revision of history was, I recommend you click over to Yahoo’s Movieland! and see for yourself (use link above).

However, the impact of Hollywood rewriting history may be devastating in the long term.

When it comes to historical accuracy, it seems there is a HUGE difference between historical fiction novels and historical fiction films. If an author of historical fiction novels did the same thing, he or she would be roasted by critics.

In fact, I’m sure many people that go to movies worldwide read nothing about history let alone read books, and they walk away after seeing these movies believing this is how it really was—the beliefs of millions influenced for a lifetime.

After the first video, there is a list of thirteen of the fourteen historical fiction movies that were featured in the Yahoo Movieland! post and the money these movies raked in.

“Season of the Witch” earned more than $90 million worldwide

“The Young Victoria” earned more than $27 million

“Inglorious Basterds” earned more than $120.5 million

“10,000 B.C.” earned about $95 million

“300” earned more than $456 million

“Elizabeth: The Golden Age” earned more than $74 million

“Apocalypto” earned more than $120.6 million

“Memoires of a Geisha” earned more than $162.2 million

“The Last Samurai” earned more than $456.7 million.

“A Beautiful Mind” earned more than $313.5 million

“The Patriot” earned more than $215.2 million

“Gladiator” earned more than $457.6 million

“Braveheart” earned more than $210.4 million

If Hollywood does this for fun and profit, what do they do out of patriotism to make America’s so-called enemies look worse than they really are while inflating a false image of America?

What we learn from this is that the world we live in is made up of smoke and mirrors and reality/facts do not seem important to many people.

There are other posts on other Blogs that explore this topic. For example, here are two:

Hollywood Is Becoming the Pentagon’s Mouthpiece for Propaganda at AlterNet

World War II Movies — Propaganda and Patriotism at Hollywood Movie

There is an old saying that says, “The more things change, the more they stay the same.” – French novelist Alphonse Karr (1808-1890)

Discover The going, going, gone American Dream


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!”