This post is by Christian Vazquez.
As I write this blog post, the United States National Debt is 19,529,882,290,867 dollars. I encourage you to check http://www.usdebtclock.org/ before you read the rest of this post because the Debt will probably have risen quite a bit higher. Why does our government have no desire for a balanced budget? Although the outrageous spending during the Bush and Obama administrations has a lot to do with our current debt, the root problem goes all the way back to the federalist Alexander Hamilton.
This mess all began with Alexander Hamilton’s agenda as first Secretary of the Treasury. One of the biggest disagreements between the Federalist and the Anti-Federalists regarded Article One, section 8, clause 18, of the Constitution. The Necessary and Proper Clause, also known as the Elastic Clause, gave Congress the right to make any law they deemed necessary and proper, and thus gave the federal government boundless power. With the Necessary and Proper Clause at his side, Hamilton convinced Washington a privately owned National Bank was Constitutional and established The First Bank of The United States.
Here’s where things get interesting, in addition to the First Bank of The United States, Hamilton convinced congress to nationalize states war time debt, and thus giving way to the first national debt. Under Hamilton’s Treasury the government then issued this debt as bonds. When you buy a government bond, you are essentially buying government debt and expecting to receive interest. These bonds were not purchased by common Americans; instead, they were quickly purchased northern elites, including many close friends of Alexander Hamilton. Who paid the interest on these bonds to these Elites? The American taxpayers of course. In essence, Hamilton sold states debts to his friends, and then placed the burden of interest on the American people.
Who owns most of America’s debt now you may be wondering; it’s not china, although they do own 7.9%. The largest holder of American debt today is still U.S. individuals and institutions. Unfortunately, it doesn’t look like this debt is going to do anything but continue rise, further burdening the American economy. The higher the debt, the more interest to those who own it. As long as elites line pockets of congress, a balanced budget is simply out of the picture. Neither presidential candidate has offered any serious solutions to solving the National Debt and deficit. Hillary Clinton had stated the debt as an issue, but offers no cuts in federal spending. Instead, she plans to increase spending, and increase taxes not only on the upper class, but the middle as well. Donald Trump probably will not increase spending, but will decrease taxes. Neither of these strategies will balance the budget, instead, American tax payers will continue to pay interest.
The Anti-Federalists argued that if left unchecked, our government would never stop growing. They also argued that individuals would always work in their self-interest if given the power to do so. As our government continues to expand exponentially, the little guy will always be the one footing the bill.
Hamilton’s Curse by Thomas DiLorenzo