Discovering a cure for the national debt would be far easier
if we had a clear grasp of its underlying causes. Until the
mid-twentieth century a considerable portion of the then
current national debt arose from the financing of several
wars. ¹ In order to finance these wars, Congress could have
voted to avoid any new debts by raising taxes to cover the
cost entirely, but taxation is not a popular measure even
while war is in progress and certainly not otherwise. Thus,
the United States has financed its wars in part by borrowing
and in part by raising taxes. But most importantly, the debts
incurred during wartime were repaid, and repaid relatively
quickly until the years following World War II.

In the second half of the twentieth century there was a
change of course. The policy of debt repayment was super-
ceded and the result was a near doubling of the debt in
relation to the nation's economy in the 1970s and 1980s. At
one level this persistent debt is quite easy to explain: federal
government expenditures simply grew faster than federal
revenues. But this only states the result and not the cause. It
fails to explain why the national debt became a permanent
fixture in the post-World War II period but not previously.

The seeds of America's modern debt dilemma began to

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