Unprecedented Debt

He inherited with his new work the responsibility of strengthening an American economy saddled with unprecedented debt. But before serving in President George Washington’s Department of the Treasury, in addition to helping create what eventually became the modern Federal Reserve, Alexander Hamilton wrote in Federalist No. 70 that unity is the first ingredient that makes for an energetic president.

“A feeble executive implies a feeble execution of government,” said Hamilton, warning of potential problems in the United States with a president executing bad government as a result of presidential unity overburdened “to the control and co-operation of others, in the capacity of counselors to him.” 1

In light of such an essay by one of the leading experts of the American presidency, it may seem puzzling that Barack Obama would choose to ignore Hamilton by installing a debt commission over presidential leadership to overhaul federal tax policy.

The Federal Reserve has also tried to fill the fiscal leadership void by calling for Obama to work at making taxes fair and simple. The current lack of executive energy in directing tax policy may help to explain why Obama has failed to recommend ideas for reform ever since he was a candidate.

Writing about Obama’s unprecedented debt, Steve Keen from the Heritage Foundation says, “The truly frightening revelation should be not what has already taken place, but what our elected officials have planned.” His comment is all the more relevant when considering President Washington’s economic leadership.2

References

1.  Edward Countryman, “Alexander Hamilton,” in The Reader’s Companion to American History, eds. Eric Foner and John A. Garraty (Boston: Houghton Mifflin, 1991), 482.  Alexander Hamilton, “The Federalist No. 70, March 15, 1788,” in Writings (New York: Library of America, 2001), 375.

2.  Jackie Calmes, “Obama Tells Debt Commission ‘Everything Has to Be on the Table,’” The New York Times, April 28, 2010, Business/Financial Desk.  Floyd Norris, “Tax Plans of the Candidates are a Mystery,” The New York Times, June 8, 2007, C1.

3.  Steve Keen, “Unprecedented Debt,” The Heritage Foundation, http://blog.heritage.org/2009/06/05/president-obama%e2%80%99s-unprecedented-debt.  C-SPAN 2009 Historians Presidential Leadership Survey, “Economic Management,” C-SPAN, http://www.c-span.org/PresidentialSurvey/Economic-Management.aspx.

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