Rainbow $10 Bill and Hamilton Versus Jackson
by Morgan Reynolds
Last week the
Federal Reserve blessed us with a new $10 bill replete with shades
of orange, yellow and red. We all feel great about the enhanced
"security" and quality of our "IOU nothing"
bills, now donít we?
of Alexander Hamilton adorns the $10 bill and he wrote in 1781 that
public debt is "a national blessing." If only the Republicís
first Treasury Secretary could see us now! The national blessing
has swollen past $8.2 trillion and keeps on inflating. Treasury
Secretary John Snow(job) pleads for a $781 billion increase in the
debt limit. Given outsized American waistlines, SUVs, and $70 billion
monthly trade deficits, federal debt of $28,000 per person and $112,000
for a family of four seems apt. A Fed survey reports that the average
home mortgage is a mere $95,000. On average, interest on the governmentís
flood of IOUs alone cost a 4-person family nearly $5,000 in annual
taxes. No wonder two adults work to make ends meet in so many families.
As more of the interest goes to foreign hands, little is heard anymore
of the soothing rationale about the public debt, "We owe it
The $20 bill
carries the portrait of Andrew Jackson but in sharp contrast to
Mr. Hamiltonís enthusiasm for debt, Jackson was its sworn enemy
in accord with the wisdom that "debt is the slavery of the
free." Old Hickory warned in 1824 that if "a national
debt is considered a national blessing, then we can get on by borrowing.
But as I believe it is a national curse, my vow shall be to pay
the national debt." Such common sense from a politician sounds
strange today. The government debt was $58 million when Jackson
won the presidency in 1828 and surpluses paid it down during his
second term, the last time that happened. Taxpayersí annual interest
cost plunged from $3 million to nothing.
Even more important
than public debt to Jackson (17671845) was his hatred of the
Bank of the United States, the nationís second experiment with a
European-style central bank. Hamilton (17551804), by contrast,
was a proponent of central banking and other accoutrements of a
"strong" national government. The Bank of the U.S. had
caused a huge inflation of money and credit followed by the inevitable
bust known as the Panic of 1819. Jackson was appalled by the suffering
and dedicated himself to returning the nation to hard money. Fiercely
opposed to credit inflation and its evil twin, fractional reserve
banking, he pounded a stake through the heart of the insidersí beast
by abolishing the Bank after campaigning on the issue in 1832. Not
until 1913 did Wall Street and its banking elite sucker Congress
into reestablishing central banking privilege, todayís beloved "Fed."
The Fed inherited
a dollar as good as gold but its mandate about an "elastic currency"
predictably led away from the good done by the "barbarous relic"
to the evil done by the inherently worthless Federal Reserve Notes
we suffer from today, scrip printed in whatever amounts found convenient.
Would Hamilton and Old Hickory be equally proud to have their portraits
on their respective FRNs? Hamilton could hardly object but Jackson
would turn in his grave.
of value once made the United States rich, thanks in part to leaders
like Andrew Jackson. Back then people owned silver and gold, debt-free
money, while we suffer from rocketing debt and distortions caused
by an inflationary currency imposed by the ruling class. We pay
for everything, value for value in accord with capitalist theory,
while insiders get plenty for nothing from the money machine.
statist myth, money is not an invention of the state. Money is the
most marketable (most "liquid") commodity and itís a natural
result of the democratic market process. Only the private market
can deliver quality money. Separation of money and state, not "better
monetary policies," is the ultimate political goal.
interesting secret is that we the people are not obliged to use
the Fedís paper money. We can lawfully use any money that is mutually
agreeable in daily exchange. Silver and gold are real commodity
money, although gold is too pricey for most trades. Silver is affordable,
at least for now (it just topped $10 an ounce).
Reynolds, Ph.D. [send him
mail], is professor emeritus at Texas A&M University and former
director of the Criminal Justice Center at the National Center for
Policy Analysis headquartered in Dallas, TX. He served as chief
economist for the US Department of Labor during 20012, George
W. Bush's first term. Visit his
© 2006 LewRockwell.com