THIS IS MY 134TH BLOG ON UNDERSTANDING MONEY
TOOLS
July, 2018
understandingmoneytools.blogspot.com
In this blog we are going to continue on with
“America”. As we just finished the
celebration of our 242nd year of independence I feel writing about
America is quite important.
What did we learn in our last blog? For one, a bit more in depth accuracy
as to how we evolved from the time frame of the Declaration of Independence
until George Washington became president on April 30th, 1789; low
and behold we had several “presidents” before him. It took the original 13 states from 1776 until 1787 to
unify, agree upon and ratify the Constitution in Philadelphia. A second important point of the last
blog, which very well holds true today, is that our new country was broke after
the Revolutionary War and we borrowed money from France. (The Revolutionary War lasted from 1775
until 1783.) A memorable issue is
that war creates debt. Debt
kills! No matter if it is a
country, a state, a county, a city or an individual; debt kills! I bring this up as I mention August 15th,
1971 when unilaterally our nation pulled out of the Bretton Woods Agreement and
went off the gold standard because we could no longer back up our currency and
debt (bonds) with a gold standard.
I believe all of this is important for “you” to understand “money”.
(We would be far better off if the politicians and world
leaders who create wars would have to put themselves and their families on the
front lines of war! I think there
would be far fewer wars!)
In this blog we are going to discuss wars that have taken
America down the path of
debt. Here is a caveat…..if you
don’t like to recognize negative facts, as true as they might be, don’t read
this blog!
Let’s discuss some wars as the Untied States has almost
always been at war with someone.
Our first war against Muslim countries in North Africa was
the First Barbary War or Barbary Coast War from 1801 to 1805 in the
Mediterranean. Our Marine song
that included “from the shores of Tripoli “ came from this period.
Many of the wars in the 1800’s were against various Indian
tribes, and these lasted through most of the 19th century.
The first big war on our soil was the very unfortunate Civil
War from 1861 until 1865. Both the
North and the South were left broke after the War that killed 620,000 men.
The next big war was World War I. We entered that arena on April 6th, 1917.
The next “biggie” would be World War II. I guess World War I was not the war to
end all wars as so many thought! The
Nazi’s invaded Poland in September, 1939. We remained neutral until the
Japanese bombed Pearl Harbor on December 7th, 1941. At that time, we were sliding back into
recession after gains made in the 1930’s based upon more debt artificially
creating employment through “works programs”. WWII ended September, 1945.
Okay, now after this brief summary on wars up until 1946,
let’s see how the United States faired on debt. According to government figures
our debt was then $241.86 billion.
Up until that point our country tried to pay down debt to some
degree. After WWII we no longer
made that commitment. To relate to
debt, the government many times expresses it in percentages to Gross Domestic
Product.
Let me present you with a brief recap here, as I will
eventually take you into today’s numbers which are scary”
- 1790,
- 29.6% US public debt to GDP
- Civil
War period – 30%
- WWI
– 30%
- WWII
– 112.7%
- 2011
(Great Recession) – 67.7%
Right now the United States Government and Private debt
stands at 300% of Gross Domestic Product, the highest in the world. Japan had that recognition, however in
the past few years we flew past them, as they stand around 240% of GDP. This is not something to be proud of,
and I believe can take down our American dollar and the USA.
We will continue on with “America” in my next blog.
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