America in Debt
“When America ceases to remember his greatness, America will be no longer great.”
—Calvin Coolidge on Alexander Hamilton
March 7, 2024 — Library of Congress
Today both the federal budget and total federal debt have reached unimaginable proportions. Widening deficits have become the rule and threaten to bankrupt our government. In 2024, many believe it near impossible to resolve our fiscal crisis.
Yet America has overcome fiscal crises before. The infant United States endured painful public debt challenges from its very beginning. Under President Warren Harding and, especially, President Calvin Coolidge, responsible fiscal policy enabled our country to narrow debt to reasonable proportions and to balance the budget many years in a row.
Key in the story is what is sometimes called the Hamiltonian Norm. The norm, a rule of our first Treasury Secretary, Alexander Hamilton, was that the U.S. would always work to repay its debts first—and support the value of our bonds. The big payoff in Hamilton’s day was that America won a global reputation for creditworthiness, which did as much to establish our standing as the muskets of George Washington’s men. If America continued to operate in Hamilton’s tradition, the longer record suggests, we would keep inflation low and make fiscal outlays possible.
By contrast, allowing fiscal policy to take precedence is dangerous. The doldrums of the 1970s were a good example of trouble that could have been avoided. Today’s example would be putting entitlement expansion first, and ignoring debt obligations, as lawmakers nowadays routinely do. Fiscal dominance, as we sometimes call it, breaks the norm and worsens both our debt obligations and, in the end, curtails the very spending ability lawmakers seek.
Led by Coolidge Foundation Coffin Fellow Dr. William Beach, this conference assembled leading minds at a national conference at the Library of Congress on March 7, 2024. Rich with historical research, the conference examined past public finance crises and their implications for future social and economic growth.
Key policymakers and some eighty hundred high schoolers and college students, alumni of Coolidge Foundation programs, attended
The conference agenda, and a listing of speakers, is included below: