Tag Archives: CNBC

Occupy Wall Street: The Return of Shays’ Rebellion

One of the demands by the Occupy Wall Street protestors is student loan relief. According to a report by CNBC:

It may be hard to pin down exactly what the Occupy Wall Street protesters want, but one of the sources of their frustration seems clear. Many of the demonstrators are drowning in student debt.

[…]

One proposed list of demands for the Occupy Wall Street movement includes “free college tuition” and “immediate across the board forgiveness” of student debt. While neither demand may be very realistic, the student debt problem is very real.

[…]

Of course, if some of the protesters get their way, with free tuition and debt forgiveness, the problem might go away. Rose Swidden, the agriculture student-turned-protester, acknowledges the demands may be far-fetched, but said it is worth a try.

“Sometimes if you shoot for the moon, you land in the stars.”

This is not the first time the United States has seen these demands for debt relief. The same demand was made 225 years ago during Shays’ Rebellion. As I describe in Angry Mobs and Founding Fathers:

Daniel Shays was one such army veteran disappointed by how the government treated veterans. Shays, who returned to farming after the war, was also angered by how creditors treated farmers who had borrowed money. As delegates from five states met in Annapolis in 1786 to try to fix some of the defects of the Articles of Confederation, Daniel Shays led a rebellion of 1,200 men against the Massachusetts government.

General Henry Knox wrote to George Washington explaining the objectives of Shays and his followers: “Their creed is, that the property of the United States has been protected from the confiscation of Britain by the joint exertions of all, and therefore ought to be the common property of all; and he that attempts opposition to this creed, is an enemy to equity and justice, and ought to be swept off the face of the earth… They are determined to annihilate all debts, public and private, and have agrarian laws, which are easily effected by the means of unfunded paper money, which shall be a tender in all cases whatever.”

While Shays’ Rebellion was put down quite easily, it could have easily led to civil war (from Angry Mobs and Founding Fathers):

Shays’ Rebellion was put down in January 1787 by a well-armed force of 4,400 men. Alexander Hamilton noted how close America came to civil war: “Who can determine what might have been the issue of her late convulsions, if the malcontents had been headed by a Caesar or by a Cromwell?”

In fact, although the rebellion itself was stopped and no Caesar or Cromwell emerged, the story did not end there (from Angry Mobs and Founding Fathers):

The rebels were pardoned and they succeeded in elections the following year. The new legislature passed the debt relief that the rebels demanded.

Shays’ Rebellion was all about debt relief, which is a major demand of the Occupy Wall Street protests.

We surely should heed the words of General Henry Knox and Alexander Hamilton and swear off this idea of debt forgiveness. Debt forgiveness is nothing more than stealing from a large number of people to satisfy the demand of a small but vocal minority.

– Michael E. Newton is the author of the highly acclaimed The Path to Tyranny: A History of Free Society’s Descent into Tyranny. His newest book, Angry Mobs and Founding Fathers: The Fight for Control of the American Revolution, was released by Eleftheria Publishing in July.

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Congressman Warns ‘We’re Greece’ in a Few Years

Part 10 on the sovereign debt crisis. CNBC reports:

If the US government doesn’t act soon to reduce the deficit and debt, it will become like Greece in a few years, Sen. Judd Gregg, (R-N.H.), told CNBC Wednesday.

“This nation is on a course where if we don’t do something about it, get federal situation, the fiscal policy [under control], we’re Greece. We’re a banana republic,” said Gregg.

“Our status as a nation is threatened by what we’ve got coming at us in the area of deficit and debt. And it’s only a few more years, at the most, that we have to work with here before the market says, ‘Sorry, your currency is something we can not continue to defend.’ ”

“You’ve gone from 20 percent of GDP to 24 percent of GDP headed toward 28 percent of GDP. That has to be brought under control or basically we’re going to bankrupt the country.”

The sovereign debt crisis is not just a European problem. The US is deep in debt and many US states are on the verge of default and have already resorted to issuing IOUs. Remember, this crisis began in Greece. It then spread to Spain and Portugal. Now Ireland is even worse than Greece was before the EU bailed them out. We should not assume that the crisis will magically end today for no apparent reason. This crisis will get worse until the infected countries, which is most of them, solves the problem. The sovereign debt crisis will remain as long as economic growth remains slow, debt remains high, deficits remain large, and government remains larger than it ought to. In other words, this sovereign debt crisis will be with us for a while.