The Price of Liberty
Paying for America's Wars
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- $11.99
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- $11.99
Publisher Description
In a bracing work of history, a leading international finance expert reveals how our national security depends on our financial security
More than two centuries ago, America's first secretary of the treasury, Alexander Hamilton, identified the Revolutionary War debt as a threat to the nation's creditworthiness and its very existence. In response, he established financial principles for securing the country—principles that endure to this day. In this provocative history, Robert D. Hormats, one of America's leading experts on international finance, shows how leaders from Madison and Lincoln to FDR and Reagan have followed Hamilton's ideals, from the greenback and a progressive income tax to the Victory Bond and Victory Garden campaigns and cost-sharing with allies.
Drawing on these historical lessons, Hormats argues that the rampant borrowing to pay for the war in Iraq and the short-sighted tax cuts in the face of a long-term war on terrorism run counter to American tradition and place our country's security in peril. To meet the threats facing us, Hormats contends, we must significantly realign our economic policies—on taxes, Social Security, Medicare, and oil dependency—to safeguard our liberty and our future.
PUBLISHERS WEEKLY
Exploring the idea that the need to pay for wars often drives financial innovation, Goldman, Sachs & Co. managing director Hormats traces the fiscal decisions made in American wars from the revolution to today's war on terror. Customs duties often fall off with hostilities, he observes, leading to increased reliance on excise and other consumption taxes. These cut civilian demand, freeing up resources for war, but may be unduly burdensome on the poor, who also do most of the dying. Taxes on businesses and the rich are more popular, he notes, but don't reduce consumption and may discourage energetic investment in war industries. Printing money is easy, but stimulates demand and inflation. Borrowing requires faith in the ability of the government to prosecute the war and its willingness to honor the debt afterwards. If broad-based, debt can cement support for the war, but if not, it can create a class of creditors with excessive political power. Hormats shows that, despite their differences, each treasury secretary seems to pick up where his predecessor left off, refining the old ideas and adding new wrinkles. Moving from history to current events, the author strongly criticizes the Bush administration for failing to adhere to the principles that have paid for 230 years of American liberty.
