France observed its national holiday this week, just 10 days after the “Big Beautiful Bill” raised the U.S. national debt ceiling by $5 trillion. Americans should look upon the fate of their allies in the War of Independence as a sobering lesson about debt management.

In 1789, France was burdened by massive debt, spiraling expenditures, and rising debt service costs. Special interests resisted meaningful fiscal reform, citizens grew increasingly alienated, and elites expressed open doubts about their government’s ability to solve the country’s problems. Sound familiar?

How did it happen? For several decades before 1789, the government was forced into heavy borrowing due to lengthy and mostly failed wars, ambitious domestic projects, a sprawling bureaucracy, subsidies for well-connected but uncompetitive industries, and other supposed priorities that the country could ill afford. As France’s national debt swelled, revenue no longer covered expenditures. Typical annual deficits exceeded government income by 20 percent to 40 percent. An increasingly policy-minded national media began to see itself as an activist political actor in its own right. Envisioning itself as “the Fourth Estate,” the media continuously fed the public reports of scandal, corruption, excess, hypocrisy, moral degeneracy, and civilizational decay, while offering radical ideas that promised easy solutions. Public confidence fell while interest rates rose. Once again, does that sound familiar?

In the reigns of Louis XV and his grandson and successor Louis XVI, government ministers attempted to address the debt crisis. They advanced reforms designed to rationalize France’s troubled system. Committed to national stability, they favored limited free trade, free enterprise, eased business development, deregulation, export-led growth, avoiding unnecessary military conflict, legitimate civic equality, and a revenue-driven simplification of the tax system. Many of France’s policymakers, bureaucrats, and jurists, however, benefited personally from the existing system’s privileges, prejudices, loopholes, and other inequities, and were unwilling to facilitate its replacement or meaningful reform.

In other words, then as now, the capital city-based administrative elite deliberately placed its self-interest above the country’s financial health and ability to survive its debt crisis. And in one of history’s great ironies, the French administrative-managerial caste defended its deleterious actions by describing them—in a trope we ceaselessly hear from distressed and dispossessed Washington bureaucrats today—as heroic liberal resistance to authoritarian tyranny. In reality, of course, both cases are the revolt of a self-interested elite against a financially strapped administration struggling to reform itself for the country’s benefit, a process Alexis de Tocqueville called the most dangerous for any government.

Bureaucratic resistance proved so great that reform of France’s old regime tax policies ultimately proved impossible. François Furet, the leading 20^th century historian of the French Revolution, called the problem “a chronic illness, for it had no cure.” Louis XVI tried to sidestep the bureaucracy and implement tax reforms by summoning a corporatist medieval institution known as the Estates-General, a tricameral elected body that also turned out to be dominated by bureaucratic special interests, especially in its Third Estate, which nominally represented the overwhelming majority of the population, or those who were not nobles or clergymen. Perhaps not coincidentally, lawyers comprised the largest percentage of its members, just as they do in Congress today.

As France’s national debt rose to unprecedented levels, interest rates peaked, and risk assessments worsened. By 1788, the last complete year before the French Revolution, government credit sank so low that the country’s lenders simply refused to hand over additional funds. Louis XVI was trapped. He and his ministers could neither implement the necessary reforms nor raise borrowed capital to maintain state operations. The critics, however, were either the very same people, or closely associated with the very same people, who had refused to cooperate with the executive’s attempts to reform the tax system and manage the debt. Now they wanted real power, over the country’s financial system and everything else.

Louis XVI had no choice but to accept elements of their power grab while moving loyal troops into Paris to guard against increasingly violent civic disturbances. Fueled by rising inflation, especially in food and fuel prices—not an unfamiliar phenomenon to average Americans today—the agitated populace accepted that the bureaucratic “resistance” was acting in the interests of “the people” against a “tyrannical” national leader, whose personal and family moral character were (again, not coincidentally) called into lurid question. Angry mobs took control of critical points in the French capital, including the royal arsenals, among which was the Bastille, an old prison used to store gunpowder. On July 14, 1789, a militant mob backed by a handful of mutinous soldiers demanded its surrender. The commander refused. Negotiations proceeded, but at some point, a shot was fired. The mob stormed the prison, seized its stores, killed the commander and his officers, and paraded their severed heads through central Paris on pikes.

The storming of the Bastille became the iconic moment of the French Revolution. It marked Louis XVI’s having lost control of his own capital in the culmination of a fiscal crisis he could neither end nor regulate in the face of bureaucratic opposition. Not long after, the revolutionary bureaucrats sensed challenges to their usurped power and launched a “Reign of Terror” —the first known use of the word “terror” —as an instrument of state policy to dispel opposition to their rule. Many of their opponents, including Louis XVI, were executed, often publicly beheaded by the guillotine. The revolutionary government carried out the Terror in the name of “equality,” “reason,” “justice,” “science,” “virtue,” and other high-minded values that its leaders rhetorically appropriated to claim moral superiority over their enemies and cement their claims to power. As the revolutionary leader Maximilien Robespierre’s unashamedly  put it, in a line that history books favorable to the French Revolution often omit,  “Terror is nothing other than swift, severe, indomitable justice; it flows, then, from virtue.”

Even as the French revolutionaries victimized representatives of the old regime, they turned on themselves, with rival factions and individuals using unchecked state power to eliminate each other in a vicious race to the bottom that promised ultimate power to the most ruthless practitioners of statecraft. In the end, the only way out was an authoritarian regime that maintained democratic forms and, finally, a military dictatorship under the revolutionary government’s most successful general, Napoleon Bonaparte.

The Trump administration had reasons to raise the debt ceiling and increase spending in the Big Beautiful Bill, some of whose provisions may, in the longer term, result in reduced spending, economic growth, the elimination of costly and unchecked migration, and deficit reduction. But with the national debt now exceeding $37 trillion and the Washington Swamp ever more resentful of losing power to a would-be reformist administration, France’s national day offers a chilling warning.