by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Battles over federal government debt go back to the beginning of our nation, as I discuss in recent testimony to the House Budget Committee. On one side in the 1790s were Treasury Secretary Alexander Hamilton and other Federalists, who favored a perpetual federal debt, believing that it would create economic and political benefits.
On the other side were Thomas Jefferson and Albert Gallatin, who were appalled by high debt, and led the opposition to Hamilton’s fiscal policies. They believed that government debt was economically dangerous and politically corruptive. And they argued that debt enriched the financial elite at the expense of the people, while unjustly imposing burdens on future generations. They were right on all counts. …
… The Treasury recently announced plans to replace Hamilton on the $10 bill. Hamilton was a brilliant man and an important Founding Father, but he was on the wrong side of the crucial debt issue. If he is going to be replaced, we should swap him out for Albert Gallatin. Gallatin’s absence on any of our coins or notes is a major oversight given that he was a highly accomplished Treasury Secretary for 13 years, serving much longer in that post than Hamilton.
Gallatin was also a congressman, senator, foreign minister, a founder of New York University, and an expert on Native American languages. Gallatin was a stellar public servant, and he was on the right side of the government debt issue. He also favored transparency in government finances, and worked to present full and accurate Treasury accounts to the public. Furthermore, Gallatin played a leading role in the Whiskey Rebellion, opposing an unfair excise tax scheme pushed by Hamilton.
With the perils of government debt now more clear than ever, it would be a good time to give Gallatin his due and feature him on our currency. That would honor a man who was every bit as smart as Hamilton, but showed more foresight in recognizing that politicians and credit markets are a toxic combination.