Funding+the+Debts+Hamilton+p7

The Revolutionary War left the United States with a large amount of debt. This debt was so large because the Continental Congress was unable to collect taxes from the colonies under the Articles of Confederation. Therefore, the war was largely funded by the issuing of bonds that were still unpaid by the end of the war. The new government lacked a steady income in order to pay off these debts. When George Wahington took office, he appointed his trusted military aide, Alexander Hamilton, as the first Secretary of the Treasury. Hamilton was a successful financier, and his main goal was to alleviate the great debt that faced the United States. To alleviate the debt, Alexander Hamilton proposed a plan to pool the debts of the individual states into a national debt.

Hamilton was a leader of the federalist party and therefore he favored a strong central government. He favored the newly drafted Constitution because it was much stronger than the Articles of Confederation and it gave the federal government the power to tax. Hamilton believed the key to making the United States a strong nation was creating a powerful economic system. The first step in creating a powerful economic system was to pay off the bonds that had financed the war. By doing this, it made the federal government appear responsible and gain the trust of the nation in them. After paying off this debt, the next step in his plan was to pool all the individual states' debts into one national debt. Even though some states such as Virginia had nearly already paid off their debts, this plan would be the most efficient in eliminating the debts of all the states. The final step in this plan was to create a source of revenue for the federal government by imposing a tax on imports.
 * __Hamilton's Viewpoint__**

Hamilton's plan to eliminate the nation's debt and establish a strong new economy has directly impacted the rest of American economic history. By pooling the debt of the individual states into one national debt, it created a sense of national unity because each state had to work and succeed as one nation and not 13 individual states. If Jefferson's plan is approved, the states nearly out of debt will become superior economically to the other states. This will create a feeling of contempt towards the federal government by the states drowning in debt for not aiding them. This will tear the nation apart as an aristocracy is established between the individual states which is exactly what the citizens fear. Hamilton's plan was good also because it made America look like an attractive nation for foreign nations to trade with. This is because America will show to the rest of the world that it is a good debtor and will pay its debts. This is proven with the flood of European investments in the new nation. If Thomas Jefferson's plan is approved then each state would have been on its own and it would have taken much longer to pay off their individual debts and America would have had trouble attracting foreign investors to help start up the economy.

**__Questions for the Opposition__** 1. We are independent now. Why should we be afraid of English government when they no longer have any control over us? No one in America would willingly set up a monarchy like in England, but we cannot completely distance ourselves from the most powerful country in the world. It is impossible for us to win another war against England and that is what Jefferson will end up doing. Their economic support will help us to pay off our immense debt.

2. Why do you want to leave every colony to pay off its own debt, when some colonies have more debt than others and the colonies that are deepest in debt will come to resent their government for not providing aide?

3. Would it not be easier to manage a national debt instead of thirteen individual debts? What if half the colonies pay off their debt and the other half is still deeply in debt? That would split the United States into two and create resentment throughout our country. The resulting unbalance will end up creating an aristocracy amongst the colonies, the same type of aristocracy that Jefferson plans to destroy.