Nothing really.Having national debt is not the same as having an outstanding credit card balance, for example. The image of a consumer finally paying off a credit card enabling her to have a surplus in her monthly budget to spend on other things isn’t the same as what happens on the country level.There’s two main differences:We (as US taxpayers) pay an interest rate that is basically equal to the rate of inflation (plus a really small premium because the US will pretty reliably pay back it’s lenders). As individual consumers, we pay a much higher premium because individuals aren’t as trustworthy as the government (when it comes to paying back debt… in every other domain, not so much).The US gov’t has no intention of paying off its debt. Consumers take out loans with terms — a 30-year mortgage, 5-year car loan, etc. The government, on the other hand, essentially finances spending in perpetuity. Meaning the US govt doesn’t pay principal, but only pays interest. Sure, individual bonds have terms, and we absolutely finish paying individual debts off, but there is a constant stream of deficits that take its place. (I think you can buy a perpetuity from the Bank of England — where you buy the bond and just get a constant stream of interest payments FOREVER).We will always have government spending that needs to get financed through tax revenues, and no level of debt — whether zero or anything greater than zero — will change that.It’s better to think about these types of questions in terms of rates. Our debt is just how much water is in the bathtub; deficit is the rate at which water level is rising (in effect, when the government raises less tax revenue than what it spends).A country gets into trouble when it is consistently generating an unsustainable deficit. (Deficits can be sustainable in some scenarios, but that requires a little more discussion on GDP and population growth). Creditors become skeptical that the country will be able to pay and hence, require a greater premium on loans — which just worsens the problem. This is a fiscal trap and happened to Greece and a few other Euro countries recently.There’s more sophisticated dynamics that goes into this; but the overall point it that the level of debt is less important than the rates of spending and tax revenues.
Britain came in the 1600s (with Sir Thomas Roe) when India was under the rule of Jehangir. India was a stronger nation back then. So, the British were contended to be traders. However, Nadir Shah's (of Iran) invasion of India in 1738, changed the picture (See: http://en.wikipedia.org/wiki/Nad...). The Mughal rulers were badly defeated and that signalled to the world that India was very weak. The East India Company immediately latched on and made use of the weakness. The timing was key. India had plenty of infighting. For instance, Tipu Sultan, who offered ferocious resistance against the Brits was undermined by our own rulers (Nizam of Hyderabad and Marathas) who surrounded the Mysore kingdom when British attacked him. The Marathas duly paid the price for the friendship with the devil with the Anglo-Maratha war in which they were badly defeated. British troops were well organized and used superior tactical & strategic skills on the warfield. French revolution and later the defeat of Napolean in 1815, distract the French from expanding their control in India. The British used this opportunity to kick out the other colonial powers from India.By the 18th century, India was under a crisis. The Aurangzeb's rule was quite bitter for non-Muslims and the Hindus were tired of Islamic rule. This gave rise to many Hindu kings (such as the Marathas). The East India Company rightly used this period to increase the divisions with their divide and rule policy. India had a very weak navy. Unlike islands like Britain or Japan, we didn't have enough incentives to build a strong navy. Naval superiority helped the British to gain and build the critical ports of India (Bombay, Madras, Calcutta) and build the empire from there. Britian was entering the age of industrial revolution at around the same time (1750) when Indian empires were weakened. The economic strength from industrial revolution gave the Brits an upper hand.
Describe what Douglas meant by popular sovereignty?
Popular sovereignty was the method to be used to either legalize or abolish slavery in a state. However, popular sovereignty itself is vague. It does not state how the vote is done, who is eligible to vote, or when the vote was taken. All in all, the decision was left to the state, and not the federal government, which was the most important idea behind popular sovereignty.
The answer depends on which is more, current spending or current taxes, and what the magnitude of the difference is.If current spending is greater, then debt will increase over time to meet the funding deficit, and more and more of the spending will go to debt service, and the deficit will grow, not into perpetuity, but until the economy collapses from the weight of the deficit spending.If revenue is more, then any outstanding debt can be retired, and eventually, when that’s all paid off, the excess currency collected would have to be distributed somehow, or perhaps taken out of circulation. It doesn’t make sense fo the government to accumulate cash for no purpose. One would think that the value of the currency would rise under this arrangement.It also very much depends on what the “same proportion” is. One percent growth would have a lot less impact than 100 percent growth.