Thomas Tooke

How to repay debt from war? Taxes!!!

In Uncategorized on May 12, 2012 at 1:14 am

As we have described earlier, not only the war impoverished the laboring classes, sent men to death for no other identifiable purpose of competing empire motives, it also resulted in a transfer of wealth from the savers to the creditor class and investor class, and finally left a sizeable amount of Federal Debt to be repaid.

As Kemmerer describes in 1920:

[…]

The greatest long-time borrower during the period of the war was the Government. Our net war debt deducting the amount due us form the Allies is approximately ten an one-half billion dollars. Most of these dollars, when the Government received them, were dollars of low purchasing power. If we should deflate rapidly and substantially the Government would repay dollars of high and continually higher purchasing power. It would get these higher purchasing power dollars by taxes. In the light of modern tendencies in federal taxation it appears probably that those who held he bonds would be the ones who would be called upon ultimately to pay the lion´s share of the taxes which would provide the Government with the funds for interest payments and amortization. But the public would not realize this; particularly in view of the tax exemption privileges enjoyed by these bondholders. It does not require much imagination therefore or political acumen to see visions of attempts at deflation being countered in the near future, as they were about half a century ago, by the charge that “the great moneyed interest, the tax exempt bondholders, who had manipulated the market so to get most of the bonds into their own hands, had artificially depressed commodity prices and were exploiting the public by forcing the value of the dollars the Government owed them. These words will have a familiar ring to persons acquainted with the demands of the Greenback Party of 1876 and with the charges later made concerning the “Crime of  1873.”

[…]

 

 

 

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