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  3. The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impat

The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impat

admin2019-11-02  25
问题    The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes. But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes.
   Anyone saying this today is accused of pessimism. The first signs of economic recovery, harbingers of a supposedly falling debt, are held up to contradict him. Yet we wouldn’t be the first to think ourselves uniquely able to escape the fate of other states felled by their debt, such as the Republic of Venice, Renaissance Genoa, or the Empire of Spain.
   The history of public debt is intimately tied to the evolution of the state itself. In the ancient empires— Babylon, Egypt, China—rulers must at least occasionally have found it necessary to borrow on the expectation of future conquests, harvests, or taxes. But it’s in Greece where the first known records of sovereign loans appeared in the 5th century B.C.. With insufficient taxes and war booty to finance their military campaigns in the Peloponnesian War, the Greek city-states took to borrowing from the religious authorities, who had been hoarding temple offerings from the faithful. The debt habit quickly spread throughout the Greek city-states, and the hubris of debt played no small part in the erosion of Hellenic power and the rise of Rome.
   Government borrowing continued, although during the entire first millennium A.D. it remained the exclusive right of princes, motivated—and reimbursed—mainly by warfare. Debt did not become truly "public" until national authority became something separate from the person of the prince. Once sovereignty finally became embodied as a state, an abstract and immortal entity, a nation’s debt could be carried over from one ruler to the next. This distinction, between the signer and the entity he represents, first appeared in Europe’s only stable organization at the time: Christian religious orders. The first known institutional loan was contracted by the English monastery of Evesham in 1205.
   The distinction proved useful and soon caught on in the Italian city-states. From the 13th to the 15th century, the princes and shipowners who governed Venice, Florence, and Genoa never stopped borrowing from merchants in order to finance their wars against one another for commercial supremacy. It was the Italians who invented the public treasury. In 1262, Reniero Zeno, Doge of Venice, explicitly allocated debt to the city, confiding its management to a specialized bureaucracy called II Monte. His innovation quickly found imitators in rival Italian city-states and beyond.
   With the rise of public treasuries came instruments for a more sophisticated management of public debt. Moratoriums, inflation, and defaults became stages of the debt cycle, and this inexorable pattern kept repeating itself, sometimes disrupted by revolutions, as in 18th-century France. Ruined by the Seven Year’s War and aid to the rebels in the American Revolution, the French kingdom was on the verge of bankruptcy. In 1787, public debt reached 80 percent of GDP and debt servicing accounted for 42 percent of state revenue. The taxpayers at the time—the bourgeoisie—took fright. What happened next is schoolbook history: finance minister Jacques Necker attempted a last-ditch effort to cut budgets and stabilize the deficit, Louis XVI summoned the Estates-General, and the French Revolution erupted.
   Across the Atlantic, meanwhile, the leaders of the newly independent United States of America were struggling to manage the consequences of their own revolution. The rebels had taken out loans to finance the War Independence, and now the young federal state had to decide how to deal with the public debt. The matter was settled on June 20, 1790, over dinner in New York. Alexander Hamilton conceded the establishment of the national capital in a neutral location; in exchange, Thomas Jefferson and James Madison agreed to roll the individual states’ war debts into bonds to be underwritten by the new federal government. In a sense, Washington, D.C., and America’s public debt were twins.
   The American and French revolutions opened a new phase in the history of debt. With power now in the people’s hands, state spending grew to cover a wide range of public services: transportation, communication, police, health care, education, even retirement. These new needs drove more and more borrowing, resulting in the creation of ever-more-sophisticated financial instruments. But trouble arose as the amount of borrowing spawned doubt about governments’ capacity to repay, leading markets to demand ever-larger returns. Faced with unsustainable debt, states often simply defaulted. Between 1800 and 2009, the world experienced more than 300 national defaults, some on all debt, others only on the debt held by foreigners. That mortal combat between states and markets is now transfixing the world. Each side is anxiously watching the other’s every move.
   How do we break the deadlock? It is necessary to recognize that the worst is possible. History provides lessons. The first concerns the very nature of public debt: it is an obligation handed down from the present generation to future ones. The latter must always pay one way or another. The second is that public debt must be handled carefully even when it’s intelligent debt and even when the borrowing is moderate.
______invented the public treasury.
选项 A、Americans
B、Italians
C、Germans
D、Chinese
答案B
解析 哪国人发明了公库?该题为细节题。文章第五段明确指出，It was the Italians who invented the public treasury．正是意大利人发明了公库。因此该题答案为B。
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