While reading my history textbook, I learned that the fiscal crisis in France was one of the many causes of the French Revolution. It weakened the king and undermined the French people’s support for the French government and eventually helped cause a revolution. By the 1780’s, France had a huge debt and did not manage their money well. Half of France’s budget went to interest payments on the government’s debt each year. About 25 % was put towards the military, and 6 % went to the King. This left under 20% to run the government and maintain the state.
There were no easy ways to fix this problem. One option was to cut spending. The government could not do this, however, because there was so little that could be cut. The government spent only 20% of its annual budget on maintaining the state. Another possibility was to declare bankruptcy, but the French government could not do this either. A third theoretical option was to raise taxes. Louis XVI tried to establish a property tax. He created the Assembly of Notables to promote support for the tax. However, the Assembly of Notables wanted control of government spending in return for their support. Louis XVI dismissed the Assembly and issued a decree imposing new taxes. The judges of the Parlement of Paris nullified Louis XVI’s decree, preventing Louis XVI from improving the fiscal position of France.
As I read all of this information, I began to think that France’s budget issues are somewhat similar to that of the US today. The US has a huge debt that totals over 16 trillion dollars. While the federal government will likely try to cut spending, it may also need to raise taxes. However, just like during the French Revolution, many people oppose new taxes and do not want to pay them. Because France was unable to resolve its tax and budget issues, the government faced a revolution. While I am not suggesting that there will be a revolution in the United States, I do feel that it might be helpful for the US government to look at history, specifically, the French revolution. US leaders should learn from the history of the French that it is important to resolve budget crises. US leaders should try to strike a balance, imposing taxes in a way that does not undermine the people’s support for the government.
For more information about the US budget and a nonpartisan analysis, visit the Congressional Budget Office website: http://www.cbo.gov/