Obamacare, Alexander Hamilton, and Learning From the Failure of Others

Alexander Hamilton is frequently mistaken for a President because his face appears on the $10 bill.  Of course, Benjamin Franklin is on the $100 bill and he isn’t a President either.  The fact that these two very illustrious and important Americans are confused with Presidents is a serious indictment of our lacks attitude toward teaching American history in this country but that is subject for another blog.  Hamilton is my focus now because of our bloated national debt, Obamacare and some interesting observations from New Zealand and Australia.  There is noting like looking at our national experiment in a socialized welfare state from the perspective of countries that have already stumbled down that sorry path and are reaping the rewards thereof.   

As a founding father, Hamilton is a flamboyant, colorful, controversial character.  He would make good television material.  He was a member of the Constitutional Convention, our first Secretary of the Treasury and co-author of The Federalist Papers.  He was also dead at age 49 from a duel with Aaron Burr.  He and President John Adams hated each other.  I am definitely, “Team Adams” on this one, but I like both of these geniuses.

Hamilton created public finance in the United States.  He told George Washington that public debt (and we had plenty even before the ratification of the Constitution) was, “the price of liberty” and, “the natural disease” of government.  Hamilton not only approved of debt, but also said we should pay it.  That second part implies that our debt would always be payable.  PAYABLE!  Folks, did you hear that last word?  This is exactly what John Maynard Keynes postulated: a sustainable debt on the part of a government can have a stabilizing effect on an economy.

Just as a family can take on the debt of a car and house and improve their lot in the mean time, as long as the payment of that debt can fit into their budget, a government can do the same.  Of course, governments seldom stay within their budget.  Our legislature is populated by people who couldn’t pass my Econ 101 class.  They spend like sailors on shore leave.

In 1790, Hamilton directed the nation to take out our countries first loan.  It was for not quite $20,000.  Our government increases its debt by that much in a third of a second!   The fact is that our national debt ($14,300,000,000,000—I like to write it out in numbers rather than the simplistic $14.3 trillion) is slightly less than this country’s GDP for a single year.  Think about this.  We are actually making more than we owe, but just barely.  We ought to be able to nibble our way out of this, but instead we are digging our national hole deeper with the unsustainable Obamacare and addiction to a welfare state.

            In traveling abroad I have been able to follow the news from two First World, civilized, industrialized, European based countries—New Zealand and Australia.  Guess what, they both traveled down the road we are on some years ago and are suffering because of it. Both countries must cut back on the governmental coverage of medicine, welfare and old-age benefits.  These are growing and wealthy countries that can not sustain this burden of debt for even a decade!  We should be learning from their mistakes rather than arrogantly assuming that, “that will never happen to us.”  The last time I heard that, it was from a boy trying to get in to my pants in high school.  And for the same reason!

            Learn from others and keep the faith.