I’d love to see the hit musical Hamilton. Alexander Hamilton is such an interesting character. He was born in the Caribbean out of wedlock, became an orphan, wasn’t known for getting along with others (see duel with Aaron Burr), and yet he had a huge influence on the way the United States was founded and still operates today. As an economist, these stories and their long-lasting effects fascinate me.
When the Revolutionary War was over, the country was deep in debt. There was no more colonial power in England willing to help out. An economic crisis could derail all the people had fought for. Hamilton knew other countries wouldn’t be willing to lend money to the United States if they didn’t honor their debts and pay back what they owed. He managed to get the country on a firm economic path by establishing a national bank and single currency and by paying back debts. Other countries were then willing to lend to the new country that needed to grow.
There was a bit of horse-trading involved in this, though. The main way to pay back the country’s debts was to collect taxes. Hamilton proposed a tax on the production and sale of liquor, a popular item in the newly formed states. Congressmen from western and southern states were not happy about this because much of the liquor in the country was produced in their states and the tax could hurt their citizens more than others. Congress negotiated to put the new capital of Washington, DC in a southern location in exchange for keeping the tax on liquor. We can all thank Hamilton and his effort to set the US on a strong economic path the next time we consider seeing the sites in the nation’s capital on a hot and steamy summer day.
Kristin Rodriguez