The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes. But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes. Anyone saying this today is accused of pessimism. The first signs of economic recovery, harbingers of a supposedly falling debt, are held up to contradict him. Yet we wouldn’t be the first to think ourselves uniquely able to escape the fate of other states felled by their debt, such as the Republic of Venice, Renaissance Genoa, or the Empire of Spain. The history of public debt is intimately tied to the evolution of the state itself. In the ancient empires— Babylon, Egypt, China—rulers must at least occasionally have found it necessary to borrow on the expectation of future conquests, harvests, or taxes. But it’s in Greece where the first known records of sovereign loans appeared in the 5th century B.C.. With insufficient taxes and war booty to finance their military campaigns in the Peloponnesian War, the Greek city-states took to borrowing from the religious authorities, who had been hoarding temple offerings from the faithful. The debt habit quickly spread throughout the Greek city-states, and the hubris of debt played no small part in the erosion of Hellenic power and the rise of Rome. Government borrowing continued, although during the entire first millennium A.D. it remained the exclusive right of princes, motivated—and reimbursed—mainly by warfare. Debt did not become truly “public“ until national authority became something separate from the person of the prince. Once sovereignty finally became embodied as a state, an abstract and immortal entity, a nation’s debt could be carried over from one ruler to the next. This distinction, between the signer and the entity he represents, first appeared in Europe’s only stable organization at the time: Christian religious orders. The first known institutional loan was contracted by the English monastery of Evesham in 1205. The distinction proved useful and soon caught on in the Italian city-states. From the 13th to the 15th century, the princes and shipowners who governed Venice, Florence, and Genoa never stopped borrowing from merchants in order to finance their wars against one another for commercial supremacy. It was the Italians who invented the public treasury. In 1262, Reniero Zeno, Doge of Venice, explicitly allocated debt to the city, confiding its management to a specialized bureaucracy called II Monte. His innovation quickly found imitators in rival Italian city-states and beyond. With the rise of public treasuries came instruments for a more sophisticated management of public debt. Moratoriums, inflation, and defaults became stages of the debt cycle, and this inexorable pattern kept repeating itself, sometimes disrupted by revolutions, as in 18th-century France. Ruined by the Seven Year’s War and aid to the rebels in the American Revolution, the French kingdom was on the verge of bankruptcy. In 1787, public debt reached 80 percent of GDP and debt servicing accounted for 42 percent of state revenue. The taxpayers at the time—the bourgeoisie—took fright. What happened next is schoolbook history: finance minister Jacques Necker attempted a last-ditch effort to cut budgets and stabilize the deficit, Louis XVI summoned the Estates-General, and the French Revolution erupted. Across the Atlantic, meanwhile, the leaders of the newly independent United States of America were struggling to manage the consequences of their own revolution. The rebels had taken out loans to finance the War Independence, and now the young federal state had to decide how to deal with the public debt. The matter was settled on June 20, 1790, over dinner in New York. Alexander Hamilton conceded the establishment of the national capital in a neutral location; in exchange, Thomas Jefferson and James Madison agreed to roll the individual states’ war debts into bonds to be underwritten by the new federal government. In a sense, Washington, D.C., and America’s public debt were twins. The American and French revolutions opened a new phase in the history of debt. With power now in the people’s hands, state spending grew to cover a wide range of public services: transportation, communication, police, health care, education, even retirement. These new needs drove more and more borrowing, resulting in the creation of ever-more-sophisticated financial instruments. But trouble arose as the amount of borrowing spawned doubt about governments’ capacity to repay, leading markets to demand ever-larger returns. Faced with unsustainable debt, states often simply defaulted. Between 1800 and 2009, the world experienced more than 300 national defaults, some on all debt, others only on the debt held by foreigners. That mortal combat between states and markets is now transfixing the world. Each side is anxiously watching the other’s every move. How do we break the deadlock? It is necessary to recognize that the worst is possible. History provides lessons. The first concerns the very nature of public debt: it is an obligation handed down from the present generation to future ones. The latter must always pay one way or another. The second is that public debt must be handled carefully even when it’s intelligent debt and even when the borrowing is moderate.

(I = Interviewer; V=Victoria) I: Victoria, I wonder then, if you could tell me a little bit about your actual job as an announcer. We’ve learned how you build up with the news, but what do you actually do yourself, and how do you prepare for your job? V: Well, in the newsroom I am sitting with the reporters and the editorial staff and the news subs rather as though, erm... I am sitting in a newspaper newsroom, in fact... I: Sorry, what do you mean by news subs? V: They’re sub-editors. They are the people who write the news stories as they come in. They are then passed to the senior duty editor and the assistant editor in the newsroom, and as stories go through the chain of people they are refined and corrected and sorted out, until they come finally to my little “in-tray“ and I have a chance to read through most stories before I go on the air. Of course, sometimes things happen at the last moment and I do not have a chance so I’ve just got to do my best and just take a couple of seconds to look through the first few lines before I launch into something. Because it’s such a pity if you start off...erm... on a bright tone on a story, and suddenly realize you’re talking about some people having been killed in a road crash. It’s very important to just have a quick flip through. I: There’s nothing sort of, to mark that this is a... a... what sort of event it is, then on your piece of paper? V: No. I have my own little mark. If it is something sad I put a small cross at the top which I was taught by Colin Doran, who in his turn was taught by Alvar Lydell...so it goes back a long way... That’s my little clue. So while I’m working on the news I’m just absorbing the news while I’m in the newsroom and checking pronunciations. If I don’t find a sentence constructed terribly easily for me, because, remember, writing for speech is different from writing for people to read in a newspaper... erm.. .I can ask that it be changed or little words altered round. For example, recently we’ve had a lot about a general election in England, and you notice I’ve to say that terribly carefully because I just can’t get my mouth round it. Some people can just plough on and say it quite easily, which is maddening. And once you get something like that which you know you can’t say, of course it looms very large on your horizon. So in a way you... you’ve got to beat down the feeling of panic when you see mis little expression approaching, otherwise it just gets worse and worse. I: Yes, what about pronouncing strange foreign names, or even Welsh names, for example? V: Well, we’ve got an excellent ...erm...place here called the Pronunciation Unit whose job is to provide us with pronunciation advice. Now they can get their foreign pronunciations either from the embassies or from tourist bureau, or indeed from the BBC’s external services, who are in the Strand... erm... and we have a number of language sections there with native speakers and quite frequently they know the people we’re talking about, and even if they don’t it would be like asking you and me how to say “Jones“— I mean, we would know. So we always have invaluable advice from them, and we can ring them up with 5 minutes to go, and they generally come up with the answers. And we have a huge index in the newsroom and in the Pronunciation Unit of all the names that have even been asked for in the history of broadcasting, and that’s kept up to date and as new people appear in politics in foreign countries, they replace the ones who have been replaced. This is the end of the FIRST interview. Questions 1 to 5 are based on what you have just heard. Question One What does Victoria do? Question Two What do “news subs“ do? Question Three How does Victoria deal with sad news? Question Four What does Victoria disagree with? Question Five What does Victoria usually do when pronouncing strange foreign names? A news announcer. A news reporter. A news editor. An assistant editor.

PASSAGE FOUR

The deal is done: until a few years ago a relatively known 【S1】______ Chinese carmaker, has got its hands on an iconic marque, Volvo. Though the Swedish company has long been 【S2】______ mired in difficulties and integration is likely to be a painful process, are some Western media, politicians and public opinions right when they are worried about a “Chinese economic imperialism“ ? For Napoleon, China was a giant best left sleep lest it 【S3】______ shake the world. Now that it is rousing itself, what sort of power are we dealing with? Predatory or restrained? Economic or military? Responsible or outward-centered? 【S4】______ Analysing whether China is a force for good in the world or whether ascent simply reflects the decline of 【S5】______ others can point to reasons for hope—or for concern—in the century coming. 【S6】______ The Chinese economy today is in rude health, accounting of more than 50 percent of global growth last 【S7】______ year. Some local players have acquired the technical expertise 【S8】______ that puts them on par with their international peers. 【S9】______ In the financial sphere, the contrast between Western and Eastern strategies are extraordinary. At the very moment when 【S10】______ the markets are weak, China launches short-selling—a practice that the West has looked upon with disdain since 2008.

在考生时代，我喜欢写自己最爱写的东西；后来到了我当教师的时候，就深深地记着“己所不欲，勿施于人”的格言，我绝不伤害他们的脑筋；有时一次出二三十个题目，由他们自由去选择，或者干脆由他们自己作主，爱写什么就写什么。他们写的情书，偶然也给我修改；说真话，那比他们平时的作文写得流利多了。前面说过，我当了大学生之后，别的没有什么高兴，最使我觉得快乐的是我有了写作的自由。这个时期，我的生活苦极了，又穷又忙；穷得连坐电车的钱也没有，忙到夜以继日地改卷子，预备功课，还不能把工作完成。原来当我在大一的时候，就兼了两班中学国文；说起来真太冒险了，自己还是个刚跨出中学不久的乡下姑娘，去教那些又高又大的北方青年，怪不得他们要叫我“孩子”先生了。

Computer Literacy Today we’ll discuss computer literacy. I. Common ways of 【T1】_____will be changed. 【T1】______ A. E-mail will replace mail delivery. B. Bills and pay checks will be delivered in the 【T2】_____version. 【T2】______ C. Greeting cards will be sent from computers. D. Shopping malls will be 【T3】______. 【T3】______ II. Our homes will be run by computers. A. Computers can 【T4】______. 【T4】______ B. 【T5】______will be linked to the computer. 【T5】______ C. Light fixtures will adjust to the right level of light. III. The way of business will be entirely changed. A. Business will be conducted via interactive 【T6】______. 【T6】______ B. Documents and files will be stored on computers hard drives. C. Many workers will work 【T7】______via the computer. 【T7】______ D. On-board computer in the car will 【T8】______. 【T8】______ IV. The 【T9】______will also join the computer age. 【T9】______ A. Every student will have access to a computer. B. Text books will be on disks. C. Students will have access to 【T10】______. 【T10】______ D. Students turn in the 【T11】______of their homework. 【T11】______ E. 【T12】______will be given at the end of tests via computers. 【T12】______ F. Some classes will be conducted by interactive teleconferences. V. Our 【T13】______will also be affected by the use of computers. 【T13】______ A. The home communication system and TV-service will 【T14】______. 【T14】______ B. Newspapers and magazines will be read 【T15】______. 【T15】______ VI. Conclusion: In the future people will need to acquire computer literacy to become productive.Computer Literacy Good morning, everybody. In today’s lecture, we are going to talk about computer literacy. Now is the time to become computer literate. Now is the time to become familiar and comfortable with the computer because in the future we will become virtually a paperless society and many daily activities will be linked to the computer. First, let’s look at common ways of daily communication. Mail delivery to the home and business will be almost entirely phased out and e-mail will replace it. Bills will come via the computer and paid the same way. Pay checks will be electronically deposited to your bank account. On special occasions such as birthdays, greeting cards will be sent from your computer to your loved one’s computer. Shopping malls will become cyber malls and we will do our shopping via the computer. You will be able to view on your monitor how you would look in a certain outfit you are considering to buy. Imagine traveling over the entire mall in a comfortable in front of your computer. Push a button and the entire stock of a store will be at your finger tips. When you do go to a store to shop, you will not use money. You will use either a credit card or debit card which will automatically deduct the amount if you purchase from your bank account. Second, our homes will be run by computers. Computers will adjust the temperature. Home appliances will be linked to the computer. Imagine driving home from work and calling your computer and having it start dinner for you. Have it adjust the temperature so your home will be at a comfortable temperature when you arrive. Window covering will be adjusted to allow the correct amount of sunlight in. Light fixtures will automatically adjust to the right level of light in your home. Furthermore, the way of business conducted is entirely changed. Instead of long distance business trips, business will be conducted via interactive teleconferences. Documents and files will be stored on computers hard drives. Much of this is done today but in the future it will expand as we become a paperless society. Many workers will not have to go to a place of employment. They will work from their homes via the computer. For those who do have to drive to work it will become less stressful as computers help to keep traffic congestion down. Cars will have on-board computers to keep them aware of road conditions, traffic backups, and which route is best to take. On-board computers will also replace maps and give directions from your current location to where you are going. If you happen to get lost, your computer will get you back to the correct road. In addition, the education system will also join the computer age. Every student will have access to a computer. Text books will be on disks. Students will have access to a vast amount of reference material via the computer online from far away universities and other institutions. Home work will be done on the computer. Instead of turning in papers on which you have done your homework, you will either turn in a disk or send it to your teachers by connecting to the Internet. Teachers will no longer have to spend hours grading papers. Homework and in-class work will be graded by the computer. Test will be taken on the computer and as soon as you finish you will know what your score is. At the end of the grading period your teacher will just punch a few keys on her computer and your report cards will print out as the computer keeps track of all your grades for the quarter. Some classes will be conducted by interactive teleconferences much the same as business conferences are conducted. This will give students in small schools the same educational opportunities as those in the larger school systems. Finally, our leisure time will also be affected by the expanded use of computers. In the future the home communication system (phones, e-mail, faxes, and modems) and TV-service will be integrated into one system. If you want to read the newspaper you will not have to travel to the driveway to pick it up. Just flip on your TV and with the aid of your computer pull up the paper on your screen and read. Magazines will be available the same way. If you want to watch a movie and just turn on the TV and you will receive a list of what is on. Order by the computer and sit back and enjoy the movie. Video games will be available to play on your TV the same way. People whose hobbies are collecting things such as cards or stamps can receive the latest information on their collections from the computer. Therefore, find yourself putting on a few extra pounds spending all your time in front of your computer system. You can get exercise programs and a computer generated diet geared to your specific needs from your computer. So to be a productive person in the future you will need to acquire computer literacy to get prepared for the future.

PASSAGE ONE

PASSAGE THREE

Peter: The law on taxis is very interesting and I know in London it’s different from other places and rules are quite strict, aren’t they? Jack: Any London cab driver does a thing called the Knowledge, which is an examination really. It’s called the Knowledge and it’s a basic test of...you get 468 runs — what they call runs — from a blue book. Peter: And the idea is that anybody can get into a taxi, anywhere in London and give the driver a destination and he’s got to know the way there. Jack: That’s the basis of the Knowledge, finding anywhere from point A to B in that six-mile radius in London. Peter: Is it difficult to learn the Knowledge? Jack: Average.. .it took me nineteen months. Now it’s taking guys three years because they want... I mean, you’ve got to have a medical, you are checked out by the police, you do the Knowledge, but after you’ve done the basic Knowledge there are still more exams to do. It can take anywhere now to two to three years. And then you do a driving test at the end. Peter: I get the impression they are very strict about taxis. Quite apart from the Knowledge, there is the license. Do you have to get a license every year? Jack: The license is renewed every three years, but for your cab, whether you rent it or you own it, you have to have a yearly overhaul which is a very strict passing test and there are some real stringent tests it’s got to pass. Peter: Is it really worth it all? Jack: Yeah, I think it is worth it. I enjoy being a taxi driver and, not only that, it does keep the standard very high, which is what we want in London. Peter: Do you feel proud to be a Londoner? Were you born in London? Jack: No, I was actually bom in Bristol but I came up to London when I was twelve. Peter: Do you think of yourself as a Bristolian or a Londoner? Jack: A few people think I am still a country boy but... because I’ve still got that accent in me. I haven’t really got a typical London Cockney accent but I see myself as a Londoner definitely now because I’ve been up here a lot longer. Peter: What do you do in your spare time? Jack: Well, I’m into boy building, that’s about.. .that takes up quite a good deal of my spare time basically. Peter: How much time? Jack: I might do a system of three days’ training with a day off followed by another three days’ training and a day off. Peter: Where do you go to train? Jack: I train at Ultra Sport gym. That’s up in Norwood. Peter: Forgive my ignorance, but are we talking about some of Mr. Universe here, with you standing up in front of an audience and playing music and putting oil on your body and all that sort of thing? Is that the kind of body building you do? Jack: Well, when you get seriously in...into the sports, you are literally building your body—all areas of your body — so on a Monday, for example, you might just train your chest with your triceps and on the Tuesday you might, I don’t know, your back and legs. You split your body up. Peter: Is just weights or do you have a lot of gadgets? Jack: We have got machines up there, but it is not a high gloss, you know, sort of fitness center that you see some other gyms have got. It is a lot of free weights. Peter: Do you have somebody supervising your training? Jack: No. I train with two other regular partners. This is the end of the SECOND interview. Questions 6 to 10 are based on what you have just heard. Question Six What is the Knowledge mentioned in the interview? Question Seven How much time does it take Jack to learn the Knowledge? Question Eight Which of the following statements is TRUE? Question Nine Why does Jack see himself as a Londoner? Question Ten What is the interview mainly about? A test about the traffic rules and the routes taxi drivers will run in London. The law on taxis in London. A test about the routes taxi drivers will run in six-mile radius in London. The driving test.

Some people believe that television gives us a window into the world around us. Television has opened up a door for us to appreciate the human experience around the world. It has changed presidential elections and it has changed the world. Additionally, it gives the children good knowledge in easy way. For example, small children can learn many things from shows such as Sesame Street and Dora. Older students can also benefit by watching shows on national geographic and the history channel. Yes, but what did we use to do before there was television? How often we hear statements like this! Television hasn’t been with us all that long, but we are already beginning to forget what the world was like without it. Before we admitted the one-eyed monster into our homes, we never found it difficult to occupy our spare time. We used to enjoy civilized pleasures. For instance, we used to have hobbies, we used to entertain our friends and be entertained by them, and we used to go outside for our amusements to theatres, cinemas, restaurants and sporting events. We even used to read books and listen to music and broadcast talks occasionally. All that flies to the past. Now all our free time is regulated by the goggle box. We rush home or gulp down our meals to be in time for this or that programme. We have even given up sitting at table and having a leisurely evening meal, exchanging the news of the day. A sandwich and a glass of beer will do—anything, providing it doesn’t interfere with the programme. The monster demands and obtains absolute silence and attention. If any member of the family dares to open his mouth during a programme, he is quickly silenced. Whole generations are growing up addicted to the telly. Food is left uneaten, homework undone and sleep is lost. The telly is a universal pacifier. It is now standard practice for mother to keep the children quiet by putting them in the living-room and turning on the set. It doesn’t matter that the children will watch rubbishy commercials or spectacles of sadism and violence—so long as they are quiet. There is a limit to the amount of creative talent available in the world. Every day, television consumes vast quantities of creative work. That is why most of the programmes are so bad: it is impossible to keep pace with the demand and maintain high standards as well. When millions watch the same programmes, the whole world becomes a village, and society is reduced to the conditions which obtain in preliterate communities. We become utterly dependent on the two most primitive media of communication: pictures and the spoken words. Television encourages passive enjoyment. We become content with second-hand experiences. It is so easy to sit in our armchairs watching others working. Little by little, television cuts us off from the real world. We get so lazy, so we choose to spend a fine day in semi-darkness, glued to our sets, rather than go out into the world itself. Television may be a splendid medium of communication, but it prevents us from communicating with each other. We only become aware how totally irrelevant television is to real living when we spend a holiday by the sea or in the mountains, far away from civilization. In quiet, natural surroundings, we quickly discover how little we miss the hypnotic tyranny of King Telly. Many researchers have been carried out time and again to know the harmful effects of watching TV shows that display more violence. It has been medically proved that watching violent TV shows filled with anger, hatred and shootings leaves a permanent scar in the brain. This eventually gets released at some point of time and the child becomes a victim of such actions in real life. Thereafter our life is tormented and the charm to live a happy and peaceful life is lost forever. What good it will be if we miss the chance to live it with love, peace and happiness?

If you smoke and you still don’t believe that there’s a definite link between smoking and bronchial troubles, heart disease and lung cancer, then you are certainly deceiving yourself. No one will accuse you of hypocrisy. Let us just say that you are suffering from a bad case of wishful thinking. This needn’t make you too uncomfortable because you are in good company. Whenever the subject of smoking and health is raised, the governments of most countries hear no evil, see no evil and smell no evil. Admittedly, a few governments have taken timid measures. In Britain for instance, cigarette advertising has been banned on television. It ought to be a disaster for big tobacco. Governments started banning cigarette advertising on television in the 1960s, and though the marketing rope is still loose in much of the world it is tightening. Many governments ban ads in print media and oblige manufacturers to display packs with gruesome warnings. The pack itself survives as a badge of a smoker’s taste and means, displayed and pocketed 20 or 30 times a day. Lighter colors hint at relative healthiness. Tall thin packs seem more feminine. In the war on tobacco marketing, packaging is “the last major frontier“, says David Hammond of the University of Waterloo in Canada. “That’s why we’re seeing such strong opposition.“ The conscience of the nation is appeased, while the population continues to puff its way to smoky, cancerous death. You don’t have to look very far to find out why the official reactions to medical findings have been so lukewarm. The answer is simply money. Tobacco is a wonderful commodity to tax. It’s almost like a tax on our daily bread. In tax revenue alone, the government of Britain collects enough from smokers to pay for its entire educational facilities. So while the authorities point out ever so discreetly that smoking may, be conceivable, be harmful, it doesn’t do to shout too loudly about it. This is surely the most short-sighted policy you could imagine. While money is eagerly collected in vast sums with one hand, it is paid out in increasingly vaster sums with the other. Enormous amounts are spent on cancer research and on efforts to cure people suffering from the disease. Countless valuable lives are lost. In the long run, there is no doubt that everybody would be much better-off if smoking were banned altogether. Of course, we are not ready for such a drastic action. But if the governments of the world were honestly concerned about the welfare of their peoples, you’d think they’d conduct aggressive anti-smoking campaigns. Far from it! The tobacco industry is allowed to spend staggering sums on advertising. Its advertising is as insidious as it is dishonest. We are never shown pictures of real smokers coughing up their lungs early in the morning. That would never do. The advertisement always depicts virile, cleanshaven young men. They suggest it is manly to smoke, even positively healthy! Smoking is associated with the great open-air life, with beautiful girls, true love and togetherness. What utter nonsense! For a start, governments could begin by banning all cigarette and tobacco advertising and should then conduct anti-smoking advertising campaigns of their own. Smoking should be banned in all public places like theatres, cinemas and restaurants. Great efforts should be made to inform young people especially of the dire consequences of taking up the habit. A horrific warning say, a picture of a death’s head should be included in every packet of cigarettes that is sold. As individuals, we are certainly weak, but if governments acted honestly and courageously, they could protect us from harm.

This is the story of a hundred-and-seventeen-year-old piece of cheese. The cheese has lived in an apartment in Brooklyn for the past years. Prior to that, it travelled the world, or more of the world than the average piece of cheese has travelled. The cheese is small—four inches long, one inch high—and it is an orangey-brown color. A person who comes in contact with it might not recognize it as cheese. Its shape more resembles that of a heart or a teardrop, or something that you would want to have a hazmat suit on to touch. Its owner, Clare Burson, a Tennessee-bora singer-songwriter by night and a docent at the Tenement Museum by day, is aware that the cheese evokes visceral reactions. When she gives tours at the Tenement Museum, she sometimes cites the decades-old bagel that was discovered in the building when it was renovated in the nineties, which disgusts people. “You think that’s something?“ she then adds. “I have a hundred-and-seventeen-year-old piece of cheese!“ Burson, who is thirty-four, recounted the cheese’s history the other day at her apartment in Cobble Hill, where she lives with her husband, a criminal-defense attorney, and their cat, Kreplach. She carried the cheese carefully from her bedroom to a table in the living room—she is reluctant to travel any greater distance with the cheese. “I worry about it, “ she said. The cheese was a going-away present for Burson’s paternal great-grandfather Charles Wainman (nee Yehezkel), upon his emigration from Lithuania, around 1893, to Johannesburg. For reasons lost to history, he never ate the cheese but kept it in a trunk that travelled with him while he worked as a trader among the Zulus, and then he fought, on the Dutch side, in the Boer Wars. About 1904, the cheese travelled to Memphis, via Leeds, in England, and Galveston, in Texas. Wainman opened a grocery store, and then, after the Great Depression, was a security guard. He died in 1944. The cheese was stored away until 1971, when Burson’s mother discovered it in the old trunk. Burson first learned of the cheese in 1999. She had just returned from Germany, where she was on a Fulbright, researching identity politics and the Holocuast. (Her maternal grandmother, born in Leipzig in 1919, escaped from Germany on the morning of Kristallnacht, and ended up in Memphis.) When Burson returned home to Tennessee, her paternal grandmother, Jojo, presented her with some more history. “Apropos of nothing, Jojo brought out the cheese, “ Burson recalled, “She said, ’Have I ever shown you this? It’s a cheese!’“ At that time, the cheese was wrapped in tinfoil and stored in an unmarked envelope. “Every time I went to visit after that, I checked on the cheese, “ Burson said. In 2007, Burson went to Lithuania, hoping to learn more about the history of the cheese—her grandmother knew only that it came from a place she called Pushville. In Vilnius, looking at a Pre-Holocuast map, Burson surmised that Pushville was Posvol, which is now Pasvalys. She discovered that no one there spoke English except for a guy at the local agricultural museum. He took her to see the site of the old synagogue, now a housewares store, and then mentioned that one of the town’s main industries is cheese. In a supermarket, she found cheese that looked a lot like her cheese, if it were a hundred and seventeen years younger: it had the same dolloplike shape. The cheese was a fat-fermented variety called Svalia, for the local river. According to a modern producer, it is “a tasteful component of sandwiches“ and “goes very well with beer.“ Burson bought a small chunk of it, but it did not make it to Tennessee for her family to taste. “I took it back to Riga, and I basically ate cheese and crackers in the hotel room for the next two days, “ she said. “It was kind of nutty. It was good.“ When her grandmother died, in 2009, the cheese went to Burson. She flew down from New York to take possession. When she got to the house, the cheese was not in the box on the shelf in the closet where it usually resided—her aunt Linda had put it in the freezer. “I was a little freaked out about it, “ she said. The cheese flew back on a Delta flight to LaGuardia. It breezed through security, probably because it smells only when it is close to your face. “It smells like old cheese, stinky feet, that sort of thing, “ Burson said. Her husband was fully supportive. “He takes issue with me having a lot of stuff, “ she said. “But I wouldn’t exactly call the cheese a tchotchke.“ Last summer, Burson took the cheese on a subway to Manhattan, where Tenement Museum employees helped her seal it in a jar. She feels the cheese is preserved now, which pleases her landlord. But Burson worries that it seems less like a relic and more like something in a lab. “I’m a little conflicted about it, “ she said.

The history of public debt is the very history of national power: how it has been won and how it has been lost. Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes. But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes. Anyone saying this today is accused of pessimism. The first signs of economic recovery, harbingers of a supposedly falling debt, are held up to contradict him. Yet we wouldn’t be the first to think ourselves uniquely able to escape the fate of other states felled by their debt, such as the Republic of Venice, Renaissance Genoa, or the Empire of Spain. The history of public debt is intimately tied to the evolution of the state itself. In the ancient empires— Babylon, Egypt, China—rulers must at least occasionally have found it necessary to borrow on the expectation of future conquests, harvests, or taxes. But it’s in Greece where the first known records of sovereign loans appeared in the 5th century B.C.. With insufficient taxes and war booty to finance their military campaigns in the Peloponnesian War, the Greek city-states took to borrowing from the religious authorities, who had been hoarding temple offerings from the faithful. The debt habit quickly spread throughout the Greek city-states, and the hubris of debt played no small part in the erosion of Hellenic power and the rise of Rome. Government borrowing continued, although during the entire first millennium A.D. it remained the exclusive right of princes, motivated—and reimbursed—mainly by warfare. Debt did not become truly “public“ until national authority became something separate from the person of the prince. Once sovereignty finally became embodied as a state, an abstract and immortal entity, a nation’s debt could be carried over from one ruler to the next. This distinction, between the signer and the entity he represents, first appeared in Europe’s only stable organization at the time: Christian religious orders. The first known institutional loan was contracted by the English monastery of Evesham in 1205. The distinction proved useful and soon caught on in the Italian city-states. From the 13th to the 15th century, the princes and shipowners who governed Venice, Florence, and Genoa never stopped borrowing from merchants in order to finance their wars against one another for commercial supremacy. It was the Italians who invented the public treasury. In 1262, Reniero Zeno, Doge of Venice, explicitly allocated debt to the city, confiding its management to a specialized bureaucracy called II Monte. His innovation quickly found imitators in rival Italian city-states and beyond. With the rise of public treasuries came instruments for a more sophisticated management of public debt. Moratoriums, inflation, and defaults became stages of the debt cycle, and this inexorable pattern kept repeating itself, sometimes disrupted by revolutions, as in 18th-century France. Ruined by the Seven Year’s War and aid to the rebels in the American Revolution, the French kingdom was on the verge of bankruptcy. In 1787, public debt reached 80 percent of GDP and debt servicing accounted for 42 percent of state revenue. The taxpayers at the time—the bourgeoisie—took fright. What happened next is schoolbook history: finance minister Jacques Necker attempted a last-ditch effort to cut budgets and stabilize the deficit, Louis XVI summoned the Estates-General, and the French Revolution erupted. Across the Atlantic, meanwhile, the leaders of the newly independent United States of America were struggling to manage the consequences of their own revolution. The rebels had taken out loans to finance the War Independence, and now the young federal state had to decide how to deal with the public debt. The matter was settled on June 20, 1790, over dinner in New York. Alexander Hamilton conceded the establishment of the national capital in a neutral location; in exchange, Thomas Jefferson and James Madison agreed to roll the individual states’ war debts into bonds to be underwritten by the new federal government. In a sense, Washington, D.C., and America’s public debt were twins. The American and French revolutions opened a new phase in the history of debt. With power now in the people’s hands, state spending grew to cover a wide range of public services: transportation, communication, police, health care, education, even retirement. These new needs drove more and more borrowing, resulting in the creation of ever-more-sophisticated financial instruments. But trouble arose as the amount of borrowing spawned doubt about governments’ capacity to repay, leading markets to demand ever-larger returns. Faced with unsustainable debt, states often simply defaulted. Between 1800 and 2009, the world experienced more than 300 national defaults, some on all debt, others only on the debt held by foreigners. That mortal combat between states and markets is now transfixing the world. Each side is anxiously watching the other’s every move. How do we break the deadlock? It is necessary to recognize that the worst is possible. History provides lessons. The first concerns the very nature of public debt: it is an obligation handed down from the present generation to future ones. The latter must always pay one way or another. The second is that public debt must be handled carefully even when it’s intelligent debt and even when the borrowing is moderate.

PASSAGE TWO

Below are a graph on tuition increase in the US and an excerpt arguing against free university education. Read them carefully and write an essay of no less than 300 words, in which you should: 1. sum up the main ideas of the graph and the excerpt; 2. explain if you agree to the excerpt or not. Graph [*] Excerpt Should University Education Be Free? Tejvan Pettinger March 3, 2014 economics In recent years, the government has sought to increase the amount students pay for studying at university. In the UK, the government has phased out grants and introduced top-up fees. With tuition fees and rising living costs, students could end up paying £50, 000 for a three year degree, and leave university with significant debts. Some argue this is a mistake. Charging for university education will deter students and leave the UK with a shortfall of skilled labour, and increase inequality of opportunity as students with low income parents will be more likely to be deterred from going to university. There are, however, also people who argue against free university education. Below are some of their major arguments. 1. Opportunity Cost. If we spend billions on free university education there is an opportunity cost of higher taxes or less spending elsewhere. Arguably, there is a greater social benefit from providing vocational training — e.g. so people could become plumbers, electricians etc. There is often a real shortage of these skills in an economy. Generally, the problem is not a shortage of graduates with art degrees, but lower level vocational skills. Therefore, there is a case for charging for university, but greater public spending to tackle this lower level skill shortages. 2. Do we have too many graduates? In recent decades there has been a rapid rise in the number of graduates. But, many graduates are leaving university to take jobs which don’t require a degree. A study by the ONS (Office for National Statistics) found that nearly 50% of workers who left university in the past five years are doing jobs which don’t require a degree. Therefore, it is a mistake to continue to fund the public expansion of university education because the economy doesn’t need more graduates as much as other skills. 3. Higher quality of education. The rapid rise in university numbers means that greater pressure is being put on university resources. Since the government is struggling to maintain public spending, let alone increase spending, there is a danger that university education and research may suffer, causing UK education to lag behind other countries. If universities can charge students, it will help maintain standards, quality of teaching and the reputation of UK universities. 4. Signalling function of higher education. Arguably, higher education acts as a signal to employers that graduates have greater capacity. As a consequence, people who gain a degree end up with a relatively higher salary. Therefore, if they financially gain from studying at university, it is perhaps fair they pay part of the cost. This is especially important for middle-class families, who send a higher proportion of people to higher education.

What has caused the debt of most powerful states in the world to grow so immense?

______invented the public treasury.

Which of the following statements about public debt is INCORRECT?