Dakota Beacon

Whether history repeats itself may be debated. That history parallels itself is self-evident.

Serious times are brewing. Times of grave economic tension foment unrest and America’s predicament today is certainly volatile. This is not the first time America faced financial crisis. Nor is this the first time an entitlement mentality combined with a massive debt coalesced into precarious straits.

Witness the Bonus Army marchers in Washington, DC, during the summer of 1932. Over 43,000 World War I veterans and their families protested deferment of  bonuses earlier promised by the federal government.

In 1924, congress passed legislation authorizing bonuses to the veterans. The tradition of bonuses stretched back to 1776 when the intent was to make up the difference between what a soldier was paid and what he might have earned had he not enlisted. With the onset of the Great Depression, and because of the high cost of bonuses ($3.5 billion), the government deferred payment with interest until 1945. Experiencing high unemployment and economic hardship, however, the veterans wanted their bonuses immediately.

The Bonus Army rallied at the US Capitol to urge passage of the Patman Bonus Bill. That bill would have paid bonuses immediately. Although the House passed the bill, the Senate rejected it on June 17. For their part, the Bonus Army refused to dismantle their encampments on the Washington Mall and in the Anacostia Tidal Basin. On July 28, they marched down Pennsylvania Avenue. The police responded violently by firing shots resulting in the death of two marchers and two policemen.

President Hoover ordered the Secretary of War to disperse the marchers. Late in the afternoon, under the command of Army Chief of Staff General Douglas MacArthur, the 12th Infantry Regiment and the 3rd Cavalry Regiment supported by six tanks moved into action. Major Dwight D. Eisenhower served as MacArthur’s liaison with the police. The cavalry charge was led by Major George S. Patton, Jr., followed by infantry with fixed bayonets and adamsite gas (vomiting agent). Hundreds of veterans were injured, several killed and the encampments burned.

President Hoover’s image suffered greatly and contributed to his defeat by Franklin D. Roosevelt in November. But, once in office, FDR dumped the vets who had helped him win the election by vetoing further bonus legislation. Facing elections in 1936, congress overrode FDR’s veto and paid the bonuses.

Now, move ahead eight decades. What follows is not a prognostication, but a reminder of historical parallels.

The inability of today’s federal government to meet its financial obligations is rapidly approaching. Several states including California, Illinois, New York, Pennsylvania, Michigan and New Jersey are already on the verge of bankruptcy.

California and New Jersey’s governors wrestle with solutions. New Jersey Governor Christie is eliminating state government positions and cutting aid to municipalities and K-12 education. Educators compare him to a terrorist and jokingly wish for his death. California Governor Schwarzenegger will eliminate the welfare-to-work program and most state subsidized child care, freeze school funding, cut state workers’ pay and deny teachers’ COLAs. As expected, the government employee unions and teacher unions fight against his reforms.

Anything the states or federal government do with their budgets will make matters worse. Continued spending and allowing debt to increase will cause investors to doubt government’s ability to repay the debt. On the other hand, cutting budgets and benefits weakens the economy perversely affecting recovery and stoking unrest. The real challenge is to distinguish the reasonable solutions from the bogus.

For the moment, North Dakota’s financial house is in order. Thanks to oil revenue and a levelheaded legislature, North Dakota cannot identify with tumultuous budget crises experienced by other states. North Dakotans certainly don’t identify with the violence of the Bonus Army days. Yet, the risk of unrest is never absent.

As an after thought, with economic chaos afoot, there is a flaw in the facade of tranquillity. As we know, congress and the president are not above shenanigans. President Obama had no problem strong-arming Germany, Great Britain and Spain and cajoling them to bail out Greece. Why would he not strong-arm a solvent state with a surplus like North Dakota into bailing out bankrupt states? Certainly, respect for the US Constitution is no deterrent for Obama and congress.

Just a thought.

Dennis M. Patrick can be contacted at P. O. Box 337, Stanley, ND 58784 or (JavaScript must be enabled to view this email address).