Chapter 10.2 Alexander Hamilton vs. Thomas Jefferson Hamilton wanted a government strong enough to fix AmericaвЂ™s problemsвЂ¦ Thomas Jefferson trusted the people to fix their own problemsвЂ¦ Do these people look happy or mad? Now that President Washington is in officeвЂ¦ вЂў ItвЂ™s time to fix the economy вЂў WhatвЂ™s the problem? вЂ“ Our government had a national debt of $81.5 million dollars! вЂў Amount of $ owed by our country to other people вЂ“ Foreign countries вЂ“ Citizens we borrowed money from вЂ“ What happens if we donвЂ™t pay these people back? Debate over settling the debt Alexander Hamilton Thomas Jefferson вЂў Wanted to pay back all bonds вЂў Ok with HamiltonвЂ™s ideas, but there is a problem: sold to citizens over time! вЂ“ Bonds = certificates purchased that can be turned in for more money in the future вЂ“ Why did Hamilton want to do this? вЂў Government gains credibility with the people вЂ“ Speculators have bought bonds from citizens for less than they are worth! вЂў Now the government is going to buy them from the speculators for full price? вЂ“ That cheats the original owner out of money! вЂў Who wins? вЂ“ Hamilton! вЂў 1790 Government starts buying bonds back! Debate over Paying off debt owed by States from the American Revolution Alexander Hamilton вЂў Argued that government should pay states debt off Thomas Jefferson вЂў Felt each state should pay back their part of the bill вЂў Why? вЂў Why? вЂ“ We all fought for freedom. вЂў So, our federal government should pay the bill. вЂ“ Some states owed a lot! вЂў Massachusetts вЂў New York вЂ“ Some did not owe much at all вЂў So who wins? вЂ“ BothвЂ¦.sort of. вЂў Virginia вЂў North Carolina They both get something in the end. Hamilton вЂў Federal government pays off the states debt. Jefferson вЂў The nationвЂ™s capital moves from the North to a more Central locationвЂ¦. вЂў In exchange forвЂ¦. вЂ“ The birth of Washington, D.C. вЂў Will be built as the new nationвЂ™s capital! New York to Washington DC Washington, D.C. 1800 Washington 1850 Washington DC today Debate over Role of Government Hamilton вЂў Had little faith in the average citizen Jefferson вЂў Had a lot of faith in the average citizen вЂ“ Said they could not be trusted to do the right thing. вЂ“ Said they should govern themselves вЂ“ Why? вЂў Because the average American does not take education seriously вЂ“ Said they would educate themselves and do what is right вЂ“ They take politics even less seriously вЂў So, you need a large government вЂ“ Job = protect the liberties of all citizens equally вЂў So, government needs to be small вЂ“ Job = stay out of the way Debate over how the Economy should grow Hamilton вЂў Government should give вЂњstimulusвЂќ money to American entrepreneurs Jefferson вЂў Government should stay out of the economies way вЂ“ Why? вЂў America is made up of farmers! вЂ“ Why? вЂ“ They know how to do it themselves! В» DonвЂ™t need any help! вЂў So they could start their own factories and businesses вЂ“ Hire people вЂ“ Make products here in USA вЂў Government should pass protective tariffs вЂ“ Tax on goods from other countries вЂў Tariffs should remain low вЂ“ Why? вЂў Keep price of goods lower. вЂ“ Helps citizens be able to afford them Debate over a national bank Hamilton вЂў Wanted to start a national bank. вЂ“ Why? вЂў So that the government can make their own money вЂ“ No more state money вЂў What is the big deal? вЂ“ Federal government would own all of the money in America! вЂ“ Not each individual state Jefferson вЂў Hated the idea of a national bank вЂ“ Why? вЂў Some states are richer than others вЂ“ They would lose this power if the federal government owned all of the money вЂў What is the big deal? вЂ“ The Constitution does not give the government the right to make a bank anywaysвЂ¦. вЂў Or does it? What does the Constitution say? вЂў Article I, Section 8 вЂ“ Congress has the right to вЂњmake all laws that are necessary and properвЂќ вЂў Hamilton (loose) вЂ“ Says a bank is necessary for future growth as a nation вЂў Jefferson (strict) вЂ“ Says a bank is convenient вЂў Not necessary Who wins? вЂў Washington agrees with HamiltonвЂ¦again. вЂў Bank of the United States вЂ“ Created in 1791 вЂў For 20 years вЂ“ If it works we will keep it longer В» If not, we get rid of it. MeanwhileвЂ¦ вЂў While America is trying to build itself into a great countryвЂ¦. вЂ“ A great country is trying to destroy itselfвЂ¦. вЂў 1789 вЂ“ France decides to have their own Revolution вЂў Replace their monarch with a democracy like AmericaвЂ¦. Review Questions вЂў What is the national debt? вЂў What are bonds? вЂў What was HamiltonвЂ™s idea to fix the economy? вЂў What was JeffersonвЂ™s idea for the role of government?