Hamilton's Permanent National Debt, A Good Idea?

Alexander Hamilton was a Federalist. He was one of the most aristocratic leaders of his time. Hamilton envisioned a complex America. An America with commercialism and a sense of urbanity. He hoped for an America that would become economically prosperous. With president, George Washington of the belief that a president should not be involved in political disputes, Alexander Hamilton became the dominant figure in Washington's administration.

At a time when America was slowly, but surely paying off its debt from the Revolution, Hamilton being the economical innovator that he was, saw an opportunity to capitalize on this. Hamilton proposed that the existing public debts be funded and he asked that the Certificates of Indebtedness that the old congress issued be withdrawn and replaced by Interest-bearing Bonds. He also asked that the states' war debts be taken over so that bondholders could look to the central government for payment. Hamilton's plan was to create a Permanent National Debt where new bonds were issued as old ones were being paid. His intention was to get the wealthy, who the government were more reliant on, to ave a reason to support the government. The reason being personal gain through the successes of the national government.


Before I state my opinion, I ask two questions. The first being, What do you feel about Hamilton's plan for a continuous national debt? Would it make America more financially prosperous or lure America into more loans it can not afford to pay off? The second is, If you were alive in that era and were also a dominant figure in Washington's administration, would you focus your attentions on the wealthy, like Hamilton did, or on the working class?

Alexander Hamilton's idea for a continuous national debt, although risky, was absolutely ingenious. Alexander understood that in government, the more influential people in government were those that had the means of funding it. There was only one problem which seemed to persist. With the Revolution debts being paid off, what other incentive did the wealthy have to invest in government? Hamilton saw this problem and knew that the result could take away a much needed source, something that could be described as sort of an "alliance" between the wealthy and the government. In his search for the answer to maintain the government's key supporters, the wealthy, he devised the system of Permanent National Debt, which is described above. This plan provided an incentive for the wealthy to maintain a vested interest in government. Hamilton's idea was not only unheard of at the time, but quite resourceful. He capitalized on what was previously a source of affliction after the war, the debts, and turned it into a method of gaining even more support, support from the highly elite in society. The idea of a Permanent Debt may seem risky, but it not only did it retain aristocratic support, but it managed to better society. Soon after the idea of Permanent National Debt, a national bank was created which provided loans and currency to businesses, gave the government a safe place to deposit federal funds, facilitated the collection of axes, and and provided a stable center to the nation's weak banking system.

Also, despite it going against everything that the American republican system was based on, I believe that Hamilton was right to focus most of his attention on the wealthy aristocrats. In this era, not many were fortunate enough to be wealthy because of the enormous burden that the Revolution placed on America, with this in mind, most common people must have been angry and bitter about the financial strains and therefore unwilling and unable to support the government financially. The wealthy however, were fully capable of supporting the government financially and were also profitable to the government at the time. With all this in mind, it is the smarter choice to curry favor with those that prove most useful in a situation and just to avoid any misunderstanding, the fact that Hamilton wanted to provide an incentive for the wealthy to maintain their support does not imply that they were given preference, it simply means that America was taking all of its people into consideration and instead of imposing bigot taxes, the government used a less refutable approach.


Before You Comment, Click Here A Little Understanding of What Hamilton's National Debt Did