At least for the moment, the U.S. Senate has averted a crisis over the federal debt ceiling, after some Republicans in the chamber grudgingly agreed yesterday to help Democrats put off a reckoning until December. That the United States has endured confrontation after confrontation in Congress over the issue—and will almost certainly do so again mere weeks from now—is, as many other commentators have noted, utterly absurd. If you were in the prime of your life; had a good, stable job; and needed money to make your beautiful, old house safe and comfortable, wouldn’t you take out a loan—and especially so if you found out lenders were rushing to give you money at just about 0 percent interest?
The U.S is not a homeowner, but it can well afford to borrow, and failure to raise the congressionally created debt ceiling is tantamount to saying the U.S. will not make good on payments it has already promised to make. This completely unnecessary bankruptcy crisis perpetually looms on the horizon—not because the country can’t pay its bills but because enough powerful people won’t let it. In the past, similar mistakes have led to catastrophe.
As a historian of the French Revolution, I cannot help but think of the impending state bankruptcy that pushed France into crisis in the late 1780s. In terms of “economic fundamentals,” prerevolutionary France was in good shape: It had Europe’s biggest population, thriving agricultural and manufacturing sectors, and an effective tax rate well below that of Great Britain. Nonetheless, decades of conflict over the size and purpose of its central government meant that disputes over budget deficits and national debt dominated French public debate. For years, the monarchy had endeavored to tax the super-wealthy; in response, many aristocrats, traditionally exempt from paying the head tax levied on commoners, decried those efforts as tyranny. Claiming to speak for France as a whole, members of a tiny and extremely privileged elite stymied all plans to tax their wealth—and did so in a way that rallied public opinion to their cause. Who else would defend the rights of the French nation against the encroachments and greed of expanding Big Government?