FREE ESSAY ON HAMILTON AND NATIONAL DEBT

HAMILTON AND NATIONAL DEBT

1) Hamilton's plan was to shape the fiscal policies. . . . to favor wealthier groups. Why
was this his intention? What were the liabilities in this approach?
Hamilton wanted the fiscal policies to favor the higher classes because he felt these
wealthy groups would lend the government money and would gain support from the important
higher social groups. He believed that it would help give the federal form of government
respect and confidence in society.
The liabilities in this approach would be that the wealthier groups may not want to lend
Congress money, even after having the wealthier groups being favored in the tax policies.
Also, the non-wealthy groups will be unhappy with the fact that despite the wealthier
classes excess of money, the poorer classes still weren't favored in the tax policies.
The lower classes may not have confidence in the government.
5) Was Hamilton wise in assuming the state debts? Explain your reasoning.
Hamilton was wise in assuming the state debts because there were more upsides to the
motion than there were downsides. Even though Congress had to pay a lot of money for the
national debt, just the fact that society will have gained trust in the government was
enough. They will also have the support of the higher classes to pay parts of the
national debt. Virginia, somewhat unhappy with the assumption of the state debts was
content after an agreement that put the federal district on the Potomac River. This would
help the District of Columbia be more involved in commerce, as well as giving it a better
reputation.
6) Why would Hamilton regard the national debt as actually being a national blessing?
Hamilton regarded the national debt as actually being a national blessing because he felt
it would strengthen the bond between society and their government. The more creditors to
whom the government owed money, the more people there would be with a personal stake in
the success of his ambitious enterprise. In other words, there would be more people
getting involved in the government. These people would be happy to loan the government
some money to pay off the national debt. (Which included the state debts) The national
debt made society unite with the government. Instead of the national debt hurting the
government, it ended up cementing the union. They were working together to pay off the
national debt.
7) What was Hamilton's gamble in undertaking such a large national debt?
Hamilton's gamble was that, in order to pay the national debt and the state debts, a LOT
of money would have to come out of the treasury. Hamilton felt that if they paid these
debts, society and the higher classes would give them support. Hamilton, by paying these
debts, expected the support of society. But what if they still wouldn't give Hamilton and
the federal form of government the support they needed? What if the higher classes
refused to loan the government money? Hamilton would be stuck. He would have to find
another way to pay the debts. And if the treasury had the money to pay off all the debts,
and society still didn't support the federal government, then all that money to pay the
state debts would go to waste. Everything was based on how society would act towards the
gesture. Hamilton's gamble wasn't a sure deal, and it could have caused the government to
be without money, and support from the people.
11) In their debate on the national bank, how was Hamilton a loose constructionist and
Jefferson a strict constructionist when considering the Constitution?
Hamilton was a loose constructionist because he based most of his arguments on Article 1,
Section VIII, paragraph 18. This article in the Constitution stated that Congress has the
power to make all laws which shall be necessary and proper for carrying into execution
the foregoing powers. . . . Hamilton loosely interprets the Constitution because this law
is not a sure thing. How should a country decided if something is necessary for the
government or not. Hamilton felt a bank was necessary, so he was loosely construing this
portion of Article 1.
Jefferson was a strict constructionist because he based most of his arguments on the
Tenth Amendment in the Bill of rights. This Amendment stated that all powers not
delegated to the United States by the Constitution, nor prohibited by it to the states,
are reserved to the states, or to the people. The power to run a national bank was not
one of the powers delegated to the United States by the Constitution. This was written
straight out and it is easily seen that it says that the US cannot just make a bank
without the consent of the people. This is why Jefferson was a strict constructionist.
Unlike Hamilton, his Amendment he was following was a sure thing.