Is U.S. Debt DifferentGovernment DebtAlexander Hamilton 2025

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Precalculus: Graphical, Numerical, Algebraic. Why did Hamilton believe a national debt would strengthen the United States and help to ensure its survival? As an underdeveloped nation, the United States needed good credit to secure loans from the Dutch and British financiers.
A public debt, properly viewed, was an asset, Hamilton argued, not a liability. If it were treated responsibly, with debt holders earning a predictable income on their investments, the government would be able to raise additional revenues through public loans rather than onerous taxes.
The U.S. has carried debt since its inception. Debts incurred during the American Revolutionary War amounted to over $75 million by January 1, 1791. Over the next 45 years, the debt continued to grow until 1835 when it notably shrank due to the sale of federally-owned lands and cuts to the federal budget.
While Hamilton distrusted popular will and believed that the federal government should wield considerable power in order steer a successful course, Jefferson placed his trust in the people as governors. Perhaps because of their differences of opinion, Washington made these men his closest advisors.
To pay these debts, Hamilton proposed that the federal government sell bondsfederal interest-bearing notesto the public. A bond is a loan from an individual to a government. Essentially, the individual provides money to the government and receives a bond in exchange.
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On one side of the issue was Hamilton, who argued that the Constitution allowed for both a national bank and for subsidies to manufacturers, and on the other was, among others, James Madison, who argued that the Constitution does not explicitly allow a central bank and that the economy must be left to pursue its