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Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt

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Just two years ago, John Steele Gordon's book on the history of the U.S. federal debt would have seemed dated, even though it was published in 1997. After more than twenty consecutive years of operating in the red, the U.S. federal government had not only erased its annual deficits and began paying down the debt, but surpluses were projected over the next ten years.

This is no longer the case. A tax cut, the war on terrorism, and a slowdown in the economy have combined to push the U.S. government's outlays above its revenues. They have also made this book -- "Hamilton's Blessing" -- relevant again.

Gordon's book is two things: 1) a basic history describing the twists and turns of U.S. fiscal policy over the last two hundred-plus years and 2) a political tract condemning the latest turn U.S. fiscal policy has taken since the Great Society.

By combining the two, Gordon seeks to show that the most recent practice of U.S. fiscal policy -- that of habitually running deficits in peacetime -- is not only unprecedented in U.S. history, but also, more importantly, unsupported by any sound theory of economics.

"Hamilton's Blessing" is well-written and interesting. The book is only slightly marred by a lack of detail in some areas. How exactly does a large public debt hurt your average citizen and by how much? We never find out.

Gordon also should have kept his own political bent out of the book. Among other things, he spends three pages in a less than 200-page book detailing Jack Kemp's personal and political history, including his football career. All very interesting, but not really relevant to the history of the U.S. debt.

John Steele Gordon is an excellent writer, one whom I have enjoyed very much in the pages of American Heritage and who wrote a nifty history of Wall Street called "The Great Game."

This book, "Hamilton's Blessing: The Extraordinary Life and Times of Our National Debt" is a good, if brief, overview of the fiscal history of the American government. It is somewhat misnamed, since the National Debt serves as a background and tie in to each period of fiscal history studied.

The author does a superb job of explaining Alexander Hamilton's establishment of our financial, banking, debt and money system. Here is a woefully under appreciated founder explained succinctly and whose brilliance and indispensability are brought forth by Gordon.

Descriptions of attitudes towards and major changes in financial policy and tools follow. Gordon covers the major aspects: the struggle over the Second National Bank, Jackson's paying off the debt (the only time the US Gov't has been debt free), Lincoln and Chase's tax, greenback and bond finance of the Civil War, the long fight to establish the income tax, the fight over high marginal rates and an efficient system of taxation, and the change in view in the last century from one that deficits and debt were something to be controlled to our current sorry state of view whereby no one worries about much about deficits anymore.

Debt, when properly used, has allowed us to primarily wage wars. It was retired in times of peace. We face an interesting time now, when debt as a percentage of GDP is much higher than it has been in most peacetimes. This raises the question that if we have to fight a truly massive and long war in the future, will we have the capacity to borrow what we need (based on historic statistics, it is a question well worth pondering).

Gordon finishes the book with a polemic against the political culture that has lost its way in terms of providing an efficient and fair and economically sound system of taxation and the willingness to moderate the nation's debt.

This is a good and interesting book. Anyone looking for a succinct telling of the development of our government's fiscal structure will appreciate this gem.

John Steele Gordon has taken what could be an amazingly dull topic, limited in appeal, and translated it into a spectacular read for anyone with at least a basic education. This great little book is a welcome addition for folks interested in finance, the U.S. economy, and the national deficit. Nonetheless, despite its breezy style and short length (traits typically necessary for widespread appeal), I don't expect it will reach a wide audience. Consider yourself lucky that you've discovered this plain-language, excellent primer on how our national debt came to be!

The author's premise, like that of Alexander Hamilton, is that a national debt can be used constructively to monetize an economy. Both men were quite correct, and the debt served its purpose beautifully in supporting the fledging United States of America. It's subsequently been bastardized by numerous administrations, as a means of funding open-ended congressional and executive expenditures of middling value. Throughout the narrative of changes in the U.S. debt, the author details the creation and destruction of the National Bank of the United States. This institution flourished under Federalist rule, and languished or disappeared entirely when populist presidents (Thomas Jefferson, Andrew Jackson) sat in office.

Overall, a remarkable book that will be discovered by too few, and certainly treasured by those lucky enough to discover it.

Hamilton's Blessing is a book that should be read by all interested in the nation's founding and the strong footing it was established on. Many picture Jefferson and Hamilton as two worthy opponents fighting over the future of the nation. Many have picture Jefferson as the winner, but after reading this book, we see that Hamilton was the true winner of this contest as his policies were the ones that set the US on the path to greatness and economic power. Gordon shows how this happened through Hamilton's efforts to monetize the national debt. Such a decision made credit available to the new nation, and ensured that the US would be able to move forward and develop without becoming dependent on a client state. Anyway, the book is a wonderful read. One I would recommend to all.

very good introduction to the financial history of US. i have learnt something from this book. also this book is well-written. and no dwelling on personal gossip of some of the historical figures.

view of the author is rather sound and interesting.

i recommend this.

Hamilton's Blessing provides an excellent introduction to the subject of our national debt and the changes in our government's philosophy of finance over the years. Unfortunately, two of the most rewarding areas of analysis, the multiplier effect in the capital markets and the failure of the government to adhere to standard accounting principles, are given short shrift in favor of tired political arguments against the welfare state. The writing is always lucid and the historical importance of the debt on the early American economy is given an elegant exposition, but the book suffers for its brevity. Obviously, the work was not intended as a definitive study of the subject, but most chapters are truly parched for detail. In sum, a good read, but for anyone familiar with the subject, woefully incomplete.

Gordon's book outlines the historical themes and historical influences underlying management of the US national debt. He carefully selects events to report and presents them with authority: Hamilton's creation of a National Bank and his vision of its value to the new Republic; Jackson's distrust of bankers and his elimination of both the National Bank and the national debt; the debt's importance in financing the Civil War and transforming the US into a World Power; Andrew Mellon's role in lowering personal taxes and its impact on the economy; the management of debt by the Federal Reserve system; how the debt saved the country during the Depression and saved the world during the second World War; and the post-WWII expansion of the debt for no apparent purpose other than self-gratification.

In his conclusion, Gordon asserts that the national debt has produced great value in the past, and we should be conscious of its expected value when we choose to expand it. He points out that we have have inflated the debt to two thirds the size of the GDP during the most prosperous time in US history, but the value produced was returned primarily to politicians rather than to citizens.

While reading Gordon's conclusion, I was reminded of the Old Testament story of Joseph, who interpreted the Pharoah's vision of seven fat cattle being eaten by seven skinny cattle. Joseph successfully managed a nation through a cycle of feast and famine because he understood how to prepare for lean years during years of plenty. The message Gordon sends is similar -- pay down the debt during our Feast years, and credit will be available to return value during our years of Famine.

This short book makes a nice supplement to a course in Money, Banking & Finance or a survey of American Public Policy. An appendix details annual growth of the national debt and displays it as a percentage of GNP/GDP.

The book is okay ... but in general the book attempts to have the reader buy into Hamilton and his develpment of the National Debt as a good thing in todays economic system.

It was set up originally to help our economy expand and to be used in a way such that in difficult times money would be borrowed so that in prosperous times it could be paid back. Although it is a factual account of a major portion of our Nations'Economic history it fails to take into account one thing in its summary, the Human Equation.

All things work great on paper but in this instance this is not the case. The current system, seeing that it has no intent of ever paying back the current debt, now has adopted the belief that as long as the debt to GNP ratio stays within + or - 5%, everything will be OK. This is where the book falls short, it doesn't analyse Hamiltons' theories as they apply today, accounting for Human Intervention. It instead tries to explain away our current economic problems as part of economic evolution. Not the case. Socialism works great on paper but fails in real life. Why.... Humanity. Simply put, if you borrow more than you could ever make or pay back, sooner or later you reach a point of critical mass (or you just keep printing more money, hence inflation).

None the less, if some basic, simplistic history is what you want want, here it is.

I tip my hat to Mr. Gordon for providing a compelling short history of national debt, and how it has been shaped by tariffs, taxation and ever-increasing spending that has run amok in recent decades. It is a fascinating study into the competing visions of fiscal responsibility, notably the balanced budget extolled by Jeffersonians, which has actually been achieved on numerous occasions, versus deficit spending espoused by Hamiltonians, and of which John Maynard Keynes became the leading exponent in the inter-wars years between WWI and WWII.

While debts traditionally run high during wars, Gordon notes that since WWII, the yearly budget has rarely been balanced. It is during this time that Keynesian theory took hold and in Gordon's view led to a budget deficit that quickly spun out of control as entitlement programs took up fully three-quarters of the yearly budget. These programs have been virtually untouchable, but in 1995 (the point to which Gordon takes his history) a new reckoning emerged with the Republican landslide in Congress. Bill Clinton duly responded by proposing a balanced budget.

Gordon is a fiscal conservative, but recognizes the need to run in the red during hard economic times. He notes that this was Hoover's mistake at the onset of the Great Depression, as he continued to push for a balanced budget despite warnings that it would make the recession worse. However, the federal deficit, which has mushroomed to over $5 trillion, threatens to bankrupt many of the entitlement programs including social security.

This book gives wonderful insite into Hamilton and the amazing story of his overcoming much opposition to create a national bank that allowed the nascent U.S. to survive. The book then gives an interesting overview of the forces that have led to changes in the federal monetary policies since it's inception. The book was hard to put down! He gives the topics a very personal flair and answers more than just who, what and when. I am in no way professionally invoved in this field. I, most importantly found this book to be entertaining.