Universal Translator

Saturday, July 23, 2011

America Has Defaulted Before. Sort of.

Norm Ornstein has a new article up at Foreign Policy titled: "Worst. Congress. Ever." (H/t, again, to Steve Benen at Washington Monthly) In it, Ornstein reviews how the GOP's extreme partisan ideology has hamstrung the 112th Congress so as to prevent even the simplest and most necessary acts from being accomplished:
[L]ook what we have now: a long-term debt disaster with viable bipartisan solutions on the table but ignored or cast aside in Congress; an impasse of the usually perfunctory matter of raising the statutory debt limit placing the United States in jeopardy of its first ever default . . . (emphasis added).
You see statements like this again and again when reading articles about the debt ceiling: that if the debt ceiling isn't raised the United States will default on its debt obligations for "the first time ever." Except that statement isn't really true. In fact, our country pretty much began by defaulting on its debts.

As most people know, the original Thirteen Colonies relied heavily on support from France when waging the Revolutionary War. As a result, after winning its independence from Britain the new United States of America was indebted to France for subtantial sums of money. Of course, our new republic had vast wealth in the form of its undeveloped western lands, but it would take a while to translate that wealth into money with which the United States could pay back its loans. So the United States continued paying its debt to France as best it could, which was expected to take quite a while.

But then something wonderful happened. In 1789 the United States scrapped the disfunctional Articles of Confederation under which it had been operating and adopted instead our current Constitution. That same year, spurred by a desire to throw off monarchical rule and establish a republic -- very much like the American colonies only a decade before -- the French Revolution began. The revolutionists actually did proclaim a republic in 1792, and the next year they executed King Louis XVI. Which means, of course, that while "France" may be an old and storied country, the French Republic is actually a few years younger than the United States.

And the United States, with the perfect insouciance of an older country confronted with a new, younger sibling in the brotherhood of nations, did what older countries typically do in such circumstances: we screwed France over.

I like to imagine how this decision might have been communicated had transatlantic cable existed back then:
Dear M. Robespierre. Stop. Our greatest congratulations on your new republic. Stop. We hope some little inspiration may have been drawn from our own country's struggle against George III. Stop. By the way, that money we borrowed during our Revolutionary War was a personal loan from your own Louis XVI. Stop. Since you have beheaded him, we no longer owe that debt. Stop. Don't call us about it anymore. Stop.
The French, naturally, didn't see things our way at all. Their unhappiness with the United States' refusal to pay back this money was one of the factors that gave rise to the "Quasi-War" that we would go on to fight with France just a few years later.

But don't feel too bad for the French. Karmically, the wheel kept turning and France would get its own chance to screw over a new nation shortly thereafter. You see, in 1804 the Haitian Revolution, which had been partially inspired by the French Revolution, was successfully concluded. Unfortunately, France was thereafter able to force Haiti to pay about 90 million francs as reparations to French slaveowners who had, after all, lost a lot of valuable property: the human beings that had successfully fought for their own freedom not to be kept as slaves. In order to finance these reparation payments Haiti had no choice but to borrow substantially from French banks. This essentially bankrupted the new country's treasury and helped to prevent it from ever achieving economic prosperity.

And in just August of last year, France announced that it has no intention of ever returning this slave money -- now worth about $22 billion -- to the impoverished Caribbean nation.

Right now I'd guess that Haiti is furiously trying to figure out if there isn't some way it can screw over South Sudan.

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