Alexander Hamilton, President’s Day and the Budget Crisis
I saw in interesting news item today about Alexander Hamilton and weather he was a U.S. President or not. Apparently, many people believe that he was because he’s on the ten dollar bill. Regardless of the fact that he was never a president, this holiday is a good time to bring it up that he was the first Secretary of Treasury, appointed by the first president on the United States, George Washington, who definitely was a president.
I talk about Hamilton because he is extremely relevant to the debate over the Federal budget, the current, so called, budget crisis. While the Congress debates how to cut this and cut that, not one Congressman/woman is talking about what has successfully been done in the past, specifically by Hamilton.
This is the same Congress that is determining what light bulbs we’re allowed to use, in order to save electricity, and in the past mandated the types of toilets we can have, in order to save water. We used to be a nation that said if we need more electricity, lets produce more. If we need more water, let’s create more fresh water projects.
So, in the debate about the budget, why doesn’t the government make more money? Other than raising taxes, that is. In fact, Hamilton’s approach was to grow the tax base by expanding industry, agriculture and infrastructure (internal improvements) in the economy.
He first settled the debt of a, newly formed, bankrupt nation and turned it into stock or assets for the new agro-industrial enterprise called the United States. But turning debt into assets will only work if you have a solid program for growing the economy, in real physical terms which in turn produces free energy. That’s where the means comes from to pay the return on the former debt turned assets.
His plan worked in conjunction with National Bank of the United States, which issued credit for the industries. This was specifically an anti-monetarist policy, which is a subject of another discussion, but the British Empire, which we had just defeated militarily, was/is a monetarist economy. So Hamilton devised the anti-monetarist credit system, unique to the fledgling U.S., in order to separate economically from the British.
So here we are, back in a monetarist system, where private banks can print money out of thin air with no backing of any tangible assets. It’s no wonder the Congress doesn’t talk about bringing in more money for the government, other than raising taxes, because in this system it’s not possible grow an economy.
Monetarism says to send jobs and industries overseas where companies make more money but don’t pay taxes into the government coffers. As long as that goes on, the government will never bring in enough revenue and will, therefore, never have a balanced budget.