Problem is, you can't cut taxes and pay down the debt. We need taxes more or less frozen, or even increased. You can, and should adjust them to provide more icentives for job creation, personal savings and domestic investment and the like. Still, the sad thing is after W and BO (blame falling on both parties here if we're honest), what we need is huge spending cuts and taxes that do nothing but redeem debt. It will be pain with no short term gain. Its exactly what we forced on the rest of the world with the "structural adjustment" provisions that attached to IMF and World Bank loans in the '80s and '90s to help third world countries crawl out of there own ruinious debt. We ignored the pain and made them do it. Guess what, it largely worked. We just pretended that we were immune from pursuing the same sorts of policies they did. Cut taxes, increase spending, and pay for it on credit. And while we're at it, export our industrial base to create a negative trade balance while draining high wage jobs. What part of that seemed smart? It worked short term, but now the Visa is frozen and every third phone call is from a bill colector. There really isn't a good short term fix here.
FQ13
You are correct, however, as I have said before, "No one who owes his continuing employment to popularity with the voting public can do such things and remain in office beyond the next election.
In the 1880's Egypt was so far in debt that the Creditor nations of Europe placed England in charge of the counties finances.
Basically they were put in receivership, The country was allowed to function on a fraction of their tax revenues, 1/3 IIRC, the remaining 2/3 went to serving the debt with English administrators overseeing the accounting, it was the beginning of English rule in Egypt.
During his Presidency Teddy Roosevelt nearly took us to war with Germany over similar actions toward Venezuala.
Churchill goes into much more detail in his book "The River War" setting the background for his adventures at the battle of Omdurman during Lord Kitchner's vain attempt to rescue Gen Charles Gordon from siege by Muslim fanatics led by "The Mahdi".
But I found this quick.
http://en.wikipedia.org/wiki/British_occupation_of_Egypt#British_OccupationThe British succeeded in defeating the Egyptian Army at Tel El Kebir in September and took control of the country putting Tawfiq back in control. The purpose of the invasion had been to restore political stability to Egypt under a government of the Khedive and international controls which were in place to streamline Egyptian financing since 1876.
http://en.wikipedia.org/wiki/Venezuela_Crisis_of_1902%E2%80%931903The Venezuela Crisis of 1902–1903 was a naval blockade of several months imposed against Venezuela by Britain, Germany and Italy over President Cipriano Castro's refusal to pay foreign debts and damages suffered by European citizens in a recent Venezuelan civil war. Castro assumed that the United States' Monroe Doctrine would see the US prevent European military intervention, but at the time the US saw the Doctrine as concerning European seizure of territory, rather than intervention per se. With prior promises that no such seizure would occur, the US allowed the action to go ahead without objection. The blockade saw Venezuela's small navy quickly disabled, but Castro refused to give in, and instead agreed in principle to submit some of the claims to international arbitration, which he had previously rejected. Germany initially objected to this, particularly as it felt some claims should be accepted by Venezuela without arbitration.
When the US press reacted negatively to incidents including the sinking of two Venezuelan ships and the bombardment of the coast, the US pressured the parties to settle, and drew attention to its nearby naval fleet. With Castro failing to back down, US pressure and increasingly negative British and American press reaction to the affair, the blockading nations agreed to a compromise, but maintained the blockade during negotiations over the details. This led to the signing of an agreement on 13 February 1903 which saw the blockade lifted, and Venezuela commit 30% of its customs duties to settling claims. When an arbitral tribunal subsequently awarded preferential treatment to the blockading powers against the claims of other nations, the US feared this would encourage future European intervention. The episode contributed to the development of the Roosevelt Corollary to the United States' Monroe Doctrine, asserting a right of the United States to intervene to "stabilize" the economic affairs of small states in the Caribbean and Central America if they were unable to pay their international debts, in order to preclude European intervention to do so.