Get rid of debt, fast
This post was originally written as a series of tweets.
In the middle of the 18th Century, France had some real big problems with its national debt. But one publisher was sure he had the solution: a little bit of self-sacrifice.
As recounted in Rebecca L. Spang’s delightful history, The Invention of the Restaurant: Paris and Modern Gastronomic Culture, in 1778 the Gazetin de comestible — “a sort of mail-order catalogue of fine foods” — published its proposal, a medieval solution to a modern problem: “If each of its readers would simply fast one day a month and donate the money saved on that day’s food to the state, the national debt would be quickly under control.”1
Needless to say, the Gazetin’s solution was not adopted. France’s national debt continued to balloon until, unable to resolve it by any other way, King Louis XVI called a meeting of the Estates General, setting off one of the most momentous chains of events in world history.
But I am not here to write about French history. Not today, anyway. The United States of America, like ancien régime France, has a very large national debt and persistent deficits. Could the Gazetin Solution work today? You bet I did the math.
The French national debt under Louis was indeed prodigious: around 5 billion livres in short- and long-term debt, per James MacDonald’s A Free Nation Deep In Debt: The Financial Roots of Democracy. That’s against government revenues of 400 million livres.2 To put that in context, the ancien régime’s debt was 12.5 times its annual revenues (which were falling); the U.S. government’s debt of $21.48 billion is just over 5 times its roughly $4 trillion in federal expenditures.3 (I don’t have GDP figures available for pre-revolutionary France on hand to make that comparison.)
So our debt problem is much more manageable than Louis’s. (We pay substantially lower interest rates, too — Jacques Necker in the 1780s was floating French bonds at interest rates near 9 percent, per Macdonald, while the U.S. is floating bonds around 2.6 percent.4) But would a little patriotic fasting be able to put a dent in it?
The federal Bureau of Labor Statistics estimates that in 2016, the average U.S. household spent $7,203 per year on food both in and out of the home.5 That comes out to $19.73 per day.
In 2016 there were about 125.85 million U.S. households.6 Each one saving $19.73 would be $2.48 billion per month, or $29.8 billion per year.
The FY2016 U.S. deficit — not debt — was $585 billion.7 Everyone going hungry once a month would reduce this by $29.8 billion or around 5 percent. So not only would all those skipped Big Macs and Lean Cuisines and bagels and steak dinners not solve America’s national debt, they wouldn’t even go one-twentieth of the way to reducing it at all.8
As it turns out, after the Revolution broke out, the French government did in fact try to solicit donations — both voluntary and semi-coerced — from its citizens. But the result was as disappointing as it would be if the U.S. tried the Gazetin Solution to its beefy debt: around 9 million livres from a forced loan expected to raise 200 million, plus freewill offerings of about 1 million livres in money and 5 million “in goods, jewels and depreciated government paper.”9 Those years did see a flowering of fine Parisian restaurants, however. You can learn about that in Spang’s book.
Rebecca L. Spang, The Invention of the Restaurant: Paris and Modern Gastronomic Culture, Cambridge, Mass., and London, England: Harvard University Press, 2000, 14. ↩
James Macdonald, A Free Nation Deep In Debt: The Financial Roots of Democracy, Princeton: Princeton University Press, 2006, 311-2. ↩
Macdonald, 268. The Balance, https://www.thebalance.com/interest-on-the-national-debt-4119024. ↩
Statista, “Number of households in the U.S. from 1960 to 2017 (in millions).” Accessed Sept. 18, 2018. ↩
The federal debt would continue to grow, albeit slightly more slowly — though as Macdonald demonstrates in his magisterial work, big national debts don’t have to be eliminated to be dealt with. They just have to be held to a growth rate below that of the national economy; if so, they simply become less significant over sufficient time. (America isn’t doing this either.) ↩
Macdonald, 313. ↩