After the war, America had gained independence but was crushed under a load of debt. Alexander Hamilton, who was a quick thinker, extremely determined, and someone who was willing to practice as much as it would take to get things right, was able to devise a plan to deal with this debt that would forever change the economy of the country. Hamilton acknowledged people’s natural self-interest and knew that he would need to fulfill this personal inclination of individuals while at the same time fulfilling the interest of the nation as a whole. He wanted to turn the revolutionary debt into an asset.
The debt from the revolution was divided into a few parts: foreign debt, debt to other states, and domestic debt. Most of the debt owed was to Americans. Because of how much of the debt was owed to the people, Hamilton formulated a process where the Federal Government would assume the debt of the state, meaning people would have to get paid back by the Federal Government. This made it so that people would need the Federal Government to succeed, for this would be the only way they would get paid off. Once taxes funded the first payoff, the government would then be able to issue more bonds, and the people would have a crucial relationship with the government.
Hamilton envisioned the United States as a place where the government would be a partner with the economic growth and development of the country. However, Thomas Jefferson thought Hamilton’s debt assumption plan favored a class of merchants. He was opposed to the new system because he thought it would lead to a dominant Northeastern world and create a version of America that was not what he wanted.
The Constitution states, “Congress has the power to make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or any Department or Officer thereof,” a clause that has been known for being interpreted in multiple different ways and argued about. Jefferson believed that incorporating a national bank would be violating the Constitution, as the Constitution does not explicitly give the government permission to create a bank. Nonetheless, Hamilton argued the opposite. He believed in the doctrine of implied powers and felt that if the government is given the power to do what is “necessary and proper”, it is implied something can be done in the most efficient way, even if the exact process is not described specifically in the Constitution.
Before Hamilton’s reforms, the United States had a very bad economy. The changes made by Hamilton allowed the country’s economy to flourish. This revolutionizing of the American economy allowed it to eventually grow to be one of the most successful economies around.
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Your post was a very informative and clear explanation of how Hamilton's debt plan tied the people to the government and led to the prolific growth of the American economy. For me, this brought up a larger question of leaders overstepping their power. Your post was a prime example of how Hamilton strengthened the federal government and made the people dependent on it, yet he did not go any further to establish a planned economy, police state, or any other extreme form of government. As we talked about in class and read in our text, many of John Marshall's decisions are also examples of this. For example, he did not grant the Supreme Court the power to force the president to deliver commissions, and he did not let states destroy the federal government through their would-be right to tax the national bank. Another example is how George Washington stepped down after two terms. However, we often see more European leaders taking their powers to the extreme. For example, when Hitler ascended to the position of Chancellor, he convinced the Reichstag to pass the Enabling Act, which gave him the power to disband the legislature and establish a dictatorship. Similarly, Napoleon came to power as leader of the French Republic, but he took his power to the extreme and declared himself emperor of the French Empire. What do you think is a fundamental difference between European and American leaders that causes the former to have a higher tendency to take their powers too far?
ReplyDeletehttp://www.historyplace.com/worldwar2/timeline/enabling.htm