Cents And Sensibility

Why we hate the new money.

I was once in a grocery store in Italy, fumbling through a mound of pocket change to pay for my lunch. The old woman at the cash register reached across the counter and pointed helpfully at the elegant brass-inlaid 500-lire coin that I had been saving since early in my trip. No bigger than a quarter, it looked like a penny framed in a silver grommet.

 
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The Federal Debt

And how it grew, and grew, and grew…

The federal government was still in the process of establishing itself in 1792 and did not have a good year financially. Total income was only $3,670,000, or 88 cents per capita. Outlays were $5,080,000. The budget deficit therefore amounted to fully 38 percent of revenues. The next year, however, the government sharply reduced expenses while enjoying increased tax receipts and showed its first budget surplus.Read more »

The Other Great Depression

In 1937 the American economy, which had been slowly rising from the depths it had reached in 1933, suddenly reversed course and sank once more. While this new economic trend enlarged the misery of the American people, it also gave the economists a new problem: what to call it. Read more »

Understanding The S&L Mess

At its roots lie fundamental tensions that have bedeviled American banking since the nation began

Bank failure is as American as apple pie. The first American failure took place in Rhode Island in 1809, when a bank capitalized at forty-five dollars issued eight hundred thousand dollars in bank notes, a sum equal to more than seventeen thousand times the resources behind it. In the 1990s the latest bank failure, alas, almost certainly took place less than a week before you began reading this article, as another savings and loan association was taken over by the government. Read more »

The Founding Wizard

Two hundred years ago the United States was a weakling republic prostrate beneath a ruinous national debt. Then Alexander Hamilton worked the miracle of fiscal imagination that made America a healthy young economic giant. How did he do it?

One price of political greatness is to be forced to campaign even long after death. The Founding Fathers, particularly, have been constantly dragged from their graves for partisan purposes. The shades of Washington, Jefferson, Hamilton, and Madison have been invoked right up to the present by American politicians seeking to add luster to their own political agendas. Read more »