Debt and power: The United States' debt in historical perspective

International Relations

Volumn 21, Issue 3, 2007, Pages 305-323

  Thompson, Helen ^a  

^a UNIVERSITY OF CAMBRIDGE   (United Kingdom)

Author keywords

Debt; International political economy; Liberalism; Power; Realism; United States

Indexed keywords

EID: 34548173478     PISSN: 00471178     EISSN: 17412862     Source Type: Journal    
DOI: 10.1177/0047117807080198     Document Type: Article

References (63)

1. CIA, Factbook, available at: http://www.cia.gov/cia/publications/ factbook (accessed 24 November, 2006).
2. 2 US Department of Commerce, Government Current Receipts and Expenditures, available at: http://www.bea.gov/bea/dn/nipaweb/ TableView.asp?SelectedTable=84&FirstYear=1999&LastYear= 2010&Freq=Qtr&Java=Y#mid (accessed 24 November 2006). This figure excludes private debt.
3. Nouriel Roubini and Brad Setser, 'Will the Bretton Woods 2 Regime Unravel Soon?: The Risk of a Hard Landing in 2005-06', p. 11, available at: http://www.stern.nyu.edu/globalmacro/ BW2-Unraveling-Roubini-Setser.pdf (accessed 25 September 2005). See also Laurence Summers, 'The US Current Account Deficit and the Global Economy', Per Jacobsson Lecture delivered in Washington DC, 3 October 2004. Barry Eichengreen, Global Imbalances and the Lessons of Bretton Woods (Cambridge, MA: NBER Working Paper 10497, 2004).
4. Jeffrey A. Frankel, 'Still the Lingua Franca', Foreign Affairs, 74(4), 1995, pp. 9-16.
5. Roubini and Setser, 'Will the Bretton Woods Regime', p. 2.
6. US Treasury, http://www/treas.gov/tic/fh.txt (accessed 24 July 2006).
7. David H. Levey and Stuart S. Brown, 'The Overstretch Myth', Foreign Affairs, 84(3), 2005, p. 1. See also 'Reply', Foreign Affairs, 84(4), 2005, pp. 198-200.
8. Levey and Brown, 'The Overstretch Myth'.
9. M. Dooley, D. Folkerts-Landau and P. Garber, The Revived Bretton Woods System: The Effects of Periphery Intervention and Reserve Management on Interest Rates and Exchange Rates in Centre Countries (Cambridge, MA: NBER Working Paper 10332, 2004).
10. Nouriel Roubini and Brad Setser, 'The United States as a Net Debtor: The Sustainability of the US External Imbalances', p. 3, available at: http:www.stern.nyu.edu/globalmacro (accessed 25 September 2005).
11. Roubini and Setser, 'Will the Bretton Woods Regime' and 'The United States as a Net Debtor'; Eichengreen, Global Imbalances.
12. 'The future of the Dollar', The Economist, 2 December 2004; The Financial Times, 24 January 2005.
13. 'Nicely Tailored?', The Economist, 10 November 2004.
14. 14 'America's Privilege: The World's Worry', The Economist, 10 November 2004.
15. Eswar Prasad and Shang-Jin Wei, The Chinese Approach to Capital Inflows: Patterns and Possible Explanations, IMF Working Paper (Washington DC: IMF, 2005), pp. 25-7.
16. http://www/treas.gov/tic/mfhhis01.txt.
17. Between 1997 and 2004 China's current account surplus widened by $36 billion, while the United States' trade deficit expanded by $529 billion. 'Asian Squirrels', The Economist, 15 September 2005.
18. On the limited consequences, see Morris Goldstein and Nicholas Lardy, 'China's Exchange Rate Policy Dilemma', American Economic Review, 96(2), 2006, pp. 422-6.
19. See Jonathan Israel, The Dutch Republic: Its Rise, Greatness and Fall 1477-1806 (Oxford: Clarendon Press, 1998).
20. Augustus J. Veenendaal Jr, 'Fiscal Crises and Constitutional Freedom in the Netherlands, 1450-1797', in Philip T. Hoffman and Kathryn Norbert, Fiscal Crises, Liberty and Representative Government 1450-1789 (Stanford, CA: Stanford University Press, 1994), p. 129.
21. Veenendaal, 'Fiscal Crises', pp. 129-30.
22. See Israel The Dutch Republic, chapter 5. Marjolein't Hart, 'The United Provinces, 1579-1806', in Richard Bonney (ed.), The Rise of the Fiscal State in Europe c. 1200-1815 (Oxford: Oxford University Press, 1999); Richard Bonney, 'The Struggle for Great Power Status and the End of the Old Fiscal Regime', in Richard Bonney (ed.), Economic Systems and State Finance (Oxford: Clarendon Press, 1995), pp. 315-92.
23. See J. Conklin, 'The Theory of Sovereign Debt and Spain under Philip II', Journal of Political Economy, 106(3), 1998, pp. 483-513.
24. James Macdonald, A Free Nation Deep in Debt: The Financial Roots of Democracy (New York: Farrar, Straus and Giroux, 2003), p. 132.
25. I. A. A. Thompson, 'Castile: Polity, Fiscality and Fiscal Crisis', in Philip T. Hoffman and Kathryn Norbert, Fiscal Crises, Liberty and Representative Government 1450-1789 (Stanford, CA: Stanford University Press, 1994), p. 173.
26. Juan Gelabert, 'Castile, 1504-1808', in Carlo M. Cipolla, The Economic Decline of Empires (London: Methuen, 1970), pp. 202-41.
27. Niall Ferguson, The Cash Nexus: Money and Power in the Modern World 1700-2000 (London: Allen Lane, 2002), p. 140.
28. T. J. A. Le Goff, 'How to Finance an Eighteenth Century War', in W. M. Ormrod, Margaret Bonney and Richard Bonney (eds), Crises, Revolutions and Self-sustained Growth: Essays in European Fiscal History 1130-1830 (Stamford, UK: Shaun Tyas, 1999), pp. 378-91.
29. Macdonald, A Free Nation, pp. 269-70; M. D. Bordo and F. Capie, 'A Tale of Two Currencies: British and French Finance during the Napoleonic War', Journal of Economic History, 51(2), 1991, pp. 303-16; Bonney, 'The Struggle'; Richard Bonney, 'France 1494-1815', in Bonney, The Rise of the Fiscal State, pp. 123-76; Kathryn Norbert, 'The French Fiscal Crisis of 1788 and the Financial Origins of the Revolution of 1789', in Hoffman and Norbert, Fiscal Crises, pp. 253-98.
30. Macdonald, A Free Nation, pp. 328-46.
31. Ferguson, Cash Nexus, p. 129.
32. In 1776 about 16 per cent of Britain's debt was held by foreigners. Ferguson, Cash Nexus, p. 286.
33. See Macdonald, A Free Nation, chapters 7-8.
34. Macdonald, A Free Nation, pp. 247-9.
35. Macdonald, A Free Nation, pp. 235-6.
36. Patrick K. O'Brien and Philip A. Hunt, 'England, 1485-1815', in Bonney, The Rise of the Fiscal State, p. 63.
37. Macdonald, A Free Nation, p. 235.
38. Bonney, 'The Struggle', p. 386.
39. See P. Harling and P. Mandler, 'From "Fiscal-Military" State to Laissez-Faire State, 1760-1850', Journal of British Studies, 32(1), 1993, pp. 44-70; John Brewer, The Sinews of Power: War, Money and the English States 1688-1783 (London: Unwin Hyman, 1989).
40. See Patrick Karl O'Brien, 'The Pax Britannica and American Hegemony: Precedent, Antecedent or Just Another History?', in Patrick Karl O'Brien and Armand Clesse, Two Hegemonies: Britain 1846-1914 and the United States 1941-2001 (Aldershot: Ashgate, 2002), pp. 3-64.
41. See Hubert Zimmerman, Money and Security: Troops, Monetary Policy, and West Germany's Relations with the United States and Britain, 1950-1971 (Cambridge: Cambridge University Press, 2002).
42. Zimmerman, Money and Security, p. 110.
43. Zimmerman, Money and Security, chapters 8-9.
44. John J. Mearsheimer, The Tragedy of Great Power Politics (London: W. W. Norton, 2001).
45. Mearsheimer, The Tragedy, pp. 143 and 146.
46. Mearsheimer, The Tragedy, p. 144.
47. Mearsheimer, The Tragedy, p. 402.
48. See Thomas Friedman, The Lexus and the Olive Tree: Understanding Globalisation (New York: Farrar, Straus and Giroux, 1999); Edward D. Mansfield, Power, Trade and War (Princeton, NJ: Princeton University Press, 1994)
49. Joseph Nye, The Paradox of American Power: Why the World's Only Superpower Can't Go it Alone (Oxford: Oxford University Press, 2002), p. 9.
50. Nye, The Paradox, pp. 55 and 73; Joseph Nye, 'US Power and Strategy after Iraq', Foreign Affairs, 82(4), 2003, pp. 60-73.
51. Nye has stated that a persistent pattern of deficit spending would be costly to American hard and soft power without saying why he thinks so: The Paradox, p. 128. He has also argued that the current account deficit may be, via the investment it represents, a vehicle for strengthening the American economy: The Paradox, p. 128.
52. Prasad and Wei, The Chinese Approach, p. 14.
53. Nye, The Paradox, pp. 220-1; Joseph Nye 'China Rising', San Diego Union Tribune, 20 March 2005.
54. For a critique of the Bretton Woods II argument from an understanding of China's choices, see Morris Goldstein and Nicholas R. Lardy, China's Role in the Revived Bretton Woods System: A Case of Mistaken Identity, Working Paper 05-2 (Washington DC: International Economics Institute, 2005).
55. Summers, 'The US Current Account Deficit', p. 8.
56. Prasad and Wei, The Chinese Approach, p. 15.
57. Goldstein and Lardy, China's Role, p. 13.
58. Goldstein and Lardy, China's Role, p. 4.
59. Niall Ferguson, Colossus: The Rise and Fall of the American Empire (London: Allen Lane, 2004), pp. 271-85.
60. Niall Ferguson and Laurence J. Kotlikoff, 'Going Critical: American Power and the Consequences of Fiscal Overstretch', National Interest, Fall 2003, p. 32.
61. US Treasury, http://www.treas.gov/topics/accounting-and-budget (accessed 2 August 2006).
62. See David Lampton and Richard Ewing, The US-China Relationship Facing International Security Crises (Washington DC: Nixon Centre, 2003), pp. 34-40.
63. See Lampton and Ewing, The US-China Relationship, p. 26.