"Hamilton wasn’t messing around. Empowered by the new government to do what he and [Robert] Morris had long been frustrated in trying to do, the young, charismatic, brilliant, diligent Secretary worked up a full-blown plan for connecting national wealth, and even more importantly national credit, to ambitious national aims. Like Morris, though to a far more sophisticated degree, Hamilton wanted the United States to become an economic powerhouse and financial empire to compete with England. And he’d been tireless in figuring out how to do it.
"The key, as Morris had always suggested, was to combine a big public debt with vigorously enforced taxes earmarked for funding that debt. That is: sell U.S. bonds to the small, rich merchant lending class and, as Morris had put it, “open the purses of the people,” collecting taxes from the American people, in metal, not paper, and earmarking revenues for paying the bondholders their 6% interest in hard, cold cash — 6% untaxed interest, that is. Federal power would thus shift national wealth upward and consolidate it. Yoking national credit to national interest, government would serve as an economic pivot between the creditors and the people and thus be in a position to finance roads, canals, wars, and other national projects...."
William Hogeland is the author of the narrative histories Declaration and The Whiskey Rebellion and a collection of essays, Inventing American History. He has spoken on unexpected connections between history and politics at the National Archives, the Kansas City Public Library, and various corporate and organization events. He blogs at http://www.williamhogeland.com. [from New Deal 2.0, link above]
1 comment:
From the ND2.0 article"
"as Secretary, his plan was hardly to pay the debt down (many of his biographers to the contrary) but to fund it. Which as those of us with credit cards know, is another thing altogether."
Inappropriate use of the 'household analogy" in a fiat monetary regime as Hogeland does not mention convertability. This calls into question Hogeland's whole premise here imo. Govt sector liabilites of some form and level have to stay established for the economy to function properly.
At another point: " federal taxation is one of the Constitution’s central purposes."
Yes this is not a "bad thing" per se though. From Prof Wray's work we know that this is critical in establishing your country's currency value/legitimacy.
I've spent a long weekend with the family here in Williamsburg, VA. At one of the Colonial Williamsburg museums they have a collection of "moneys", coinage, that was used in that pre-constitutional era in the colonies. I took some pix and will do blogs on it later but to sum it up briefly imo: CHAOS
I think Hamilton was on the right track, but of course "the devil" is in the details..... and distributional problems of course can occur...
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