[Verse 1] Seventeen seventeen, Robert Walpole built a vault, Called it the sinking fund, swore the deficit would halt, Surplus coin to drown the debt, a patient slow design, But Parliament kept dipping in to fund the next campaign, Wars and pensions, shiny palaces, the ledger stayed the same, The sinking fund kept sinking lower, robbed in its own name. [Chorus] Walpole's fund got robbed each year, Pelham cut the rate and made the debt stand clear, Three percent Consols, a bond that never dies, Pitt's million pounds a year chasing compound skies, Price did the math but politics closed its eyes, Sinking funds keep sinking — that's the lullaby. [Verse 2] Seventeen forty-nine through fifty-seven, Henry Pelham swept the floor, Melted down the old annuities, nobody needed more, Stitched a hundred scattered bonds into a single thread, Named it the Consolidated Stock, perpetual instead — No maturity, no deadline, just a coupon paid forever, Three percent carved into London's bedrock ledger. [Chorus] Walpole's fund got robbed each year, Pelham cut the rate and made the debt stand clear, Three percent Consols, a bond that never dies, Pitt's million pounds a year chasing compound skies, Price did the math but politics closed its eyes, Sinking funds keep sinking — that's the lullaby. [Verse 3] Seventeen eighty-six young Pitt stood firm behind the page, Richard Price had drawn him charts of interest and its age — "A penny locked away compounds to mountains, given time," So commissioners were paid a million, steady, prime, Buying back the stock to bury debt beneath the weight, Till eighteen twenty-eight arrived and quietly sealed its fate. [Verse 4] But the critics saw the flaw that Price had never seen so clear, Borrowing to fund the fund just doubled interest each year, Robert Hamilton wrote it down in black and white and plain: A sinking fund fed by new loans is a serpent in the drain, Napoleon's wars came calling and the surplus turned to dust, The whole mechanical illusion crumbled into rust, For compound growth needs peace and surplus, honest hands and time, Not war bonds stacked on war bonds in an ever-climbing climb. [Bridge] Borrow, convert, amortize — the toolkit never dies, Eighteen eighty-eight rewrote the terms beneath Goschen's eyes, Nineteen thirty-two the Treasury pulled the lever twice, Every generation refinances debt at a lower price, Consols traded on past empire, perpetual and plain, Till decimal pounds and index funds retired the old refrain. [Outro] Sink it, stitch it, convert it again, History's ledger remembers when Walpole leaked and Pelham sealed and Pitt believed in Price — Debt management's oldest trick: refinance, roll the dice. [Chorus] Walpole's fund got robbed each year, Pelham cut the rate and made the debt stand clear, Three percent Consols, a bond that never dies, Pitt's million pounds a year chasing compound skies, Price did the math but politics closed its eyes, Sinking funds keep sinking — that's the lullaby.
← The South Sea Bubble | Fiscal Collapse of the Ancien Régime →