During my sporadic research on Alexander Hamilton, I came across an interesting quote that I jotted down:
A national debt, if it is not excessive, will be to us a national blessing.– Alexander Hamilton
The reason, I found this quote so noteworthy was because it so succinctly seems to capture Alexanders views on a debt, inflation & government
Hamilton’s Views on Debt
Alexander Hamilton believed that the government’s ability to borrow money was important for the country’s economic growth and development. He thought that public debt could be used as a tool to promote economic stability and encourage foreign investment.
Hamilton held the view that credit was the key to economic growth & development. He believed that if the government issued debt securities, it would establish the government’s creditworthiness and demonstrate that it was capable of meeting its obligations. This, in turn, would attract investors, who would be willing to lend money to the government and invest in the country’s economy. This increased investment would help fund public projects, such as infrastructure, which would create jobs and stimulate the economy.
Additionally, Hamilton believed that public debt could be used to promote national unity. By pooling together the debts of the states, the federal government could create a shared national obligation. This would help bind the states together and strengthen the federal government’s authority. Moreover, Hamilton believed that by issuing government securities, the government could provide a safe and stable investment opportunity for the public, which would help encourage saving and promote economic growth.
Hamilton’s Views on Monetary Policy
Alexander Hamilton seemed to be strong proponent of a centralized system. He advocated for both: a centralized bank and a centralized government. He believed a centralized system would be more suited to provide stability to the “young American economy” (much like how many crypto-protocols today begin with a centralized approach)
He believed that the government should play an active role in managing monetary policy and that a national bank could help regulate the money supply and promote economic growth.
Hamilton also believed in a sound currency, and he saw the value of a stable currency as critical to promoting commerce and economic growth. He supported the use of paper currency backed by gold and silver, and he favored a strong federal government that could enforce laws and regulations to prevent counterfeiting and other forms of fraud.
Overall, Hamilton’s views on monetary policy emphasized the importance of a strong and stable financial system as a key component of economic growth and prosperity.
Hamilton’s Views on Excessive Debt
Hamilton recognized that excessive debt could be harmful to the economy and the stability of the government. He believed that a moderate amount of debt was necessary for the government to function and that it could be used to promote economic growth, but that too much debt could lead to economic instability and weaken the government’s ability to govern effectively.
Hamilton proposed a plan to pay off the existing national debt through a combination of new revenue streams and the issuance of new government bonds. Essentially, he believed that the government should have a sufficient amount of revenue from taxes and tariffs to pay off its debts in a timely manner, rather than continuously relying on issuing new bonds to finance the national debt. Hamilton suggested tat new debt should only be accompanied if new revenue was generated.