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National Debt and Credit Quotes

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10 dollar bill close up Alexander Hamilton's most well-known quote with regards to debt is "A national debt will be to us a national blessing."  However, this is an unfair editing of what Hamilton actually wrote, leaving out the key part of the phrase - "if it is not excessive."

Thus, this statement is often taken out of context. Many assume that Hamilton encouraged debt as a solution in general, or that he believed perpetual debt was beneficial.

Those assumptions are far from the truth. Read the quotes below to get a better idea of how Hamilton viewed debt, including how it can be used to create credit, as well as the importance of paying it off.

Important Note: It is critical to understand the context in which Hamilton wrote these letters and reports. The United States had already racked up millions in debt from the Revolutionary War. These writings center around the debate on Hamilton's plan to pay off that debt responsibly - not to increase debt on purpose through excessive government spending.


rsz quote national debt

A national debt, if it is not excessive, will be to us a national blessing. It will be a powerful cement of our Union. 

-Alexander Hamilton, Letter to James Duane, September 3, 1781


rsz quote sound policy debts

[S]ound policy condemns the practice of accumulating debts.

-Alexander Hamilton, New York Ratifying Convention Remarks (Francis Child's Version), June 27, 1788


rsz quote ardenty wish incorporated

Persuaded as the Secretary is, that the proper funding of the present debt, will render it a national blessing: Yet he is so far from acceding to the position, in the latitude in which it is sometimes laid down, that "public debts are public benefits," a position inviting to prodigality, and liable to dangerous abuse,—that he ardently wishes to see it incorporated, as a fundamental maxim, in the system of public credit of the United States, that the creation of debt should always be accompanied with the means of extinguishment. This he regards as the true secret for rendering public credit immortal. 

-Alexander Hamilton, "Report on Public Credit", January 9, 1790

 


 

rsz quote price of liberty new

This reflection derives additional strength from the nature of the debt of the United States. It was the price of liberty. The faith of America has been repeatedly pledged for it, and with solemnities, that give peculiar force to the obligation [of paying off the debt].

-Alexander Hamilton, "Report on Public Credit", January 9, 1790

 


 

rsz quote perpetual tendency of debt new

 And as the vicissitudes of Nations beget a perpetual tendency to the accumulation of debt, there ought to be in every government a perpetual, anxious and unceasing effort to reduce that, which at any time exists, as fast as shall be practicable consistently with integrity and good faith.

-Alexander Hamilton, "Report on Manufactures," December 5, 1791

 


 

rsz 1quote states like individuals new

States, like individuals, who observe their engagements [pay off their debts], are respected and trusted: while the reverse is the fate of those, who pursue an opposite conduct.

-Alexander Hamilton, "Report on Public Credit", January 9, 1790

 


 

rsz quote necessity for borrowing

And as, on the one hand, the necessity for borrowing in particular emergencies cannot be doubted, so, on the other, it is equally evident that, to be able to borrow upon good terms, it is essential that the credit of a nation should be well established.

-Alexander Hamilton, "Report on Public Credit", January 9, 1790

 


 

Nothing can more interest the National Credit and prosperity, than a constant and systematic attention to husband [manage prudently] all the means previously possessed for extinguishing the present debt, and to avoid, as much as possible, the incurring of any new debt.

-Alexander Hamilton, Report Relative to the Additional Supplies for the Ensuing Year, March 16, 1792

 


 

"In framing a government for posterity as well as ourselves, we ought, in those provisions which are designed to be permanent, to calculate, not on temporary, but on permanent causes of expense"

-Alexander Hamilton, Federalist No. 34, January 4, 1788

 


 

rsz 1quote credit specific and permanent funds new

"CREDIT supposes specific and permanent funds for the punctual payment of interest, with a moral certainty of a final redemption of the principal."

-Alexander Hamilton, The Continentalist No. IV, August 30, 1781

 


 

Establish that a Government may decline a provision for its debts, though able to make it, and you overthrow all public morality, you unhinge all the principles that must preserve the limits of free constitutions.

-Alexander Hamilton, "The Defence of the Funding System", July 1795

 


 

rsz quote credit essential new

"There can be no time, no state of things, in which Credit is not essential to a Nation..."

-Alexander Hamilton, Report on a Plan for the Further Support of Public Credit, January 16, 1795

 


 

…[It is] of the greatest consequence that the debt should, with the consent of the creditors, be remoulded into such a shape as will bring the expenditure of the nation to a level with its income. Till this shall be accomplished the finances of the United States will never wear a proper countenance. Arrears of interest, continually accruing, will be as continual a monument, either of inability or of ill faith, and will not cease to have an evil influence on public credit.

-Alexander Hamilton, "Report on Public Credit", January 9, 1790

 


 

But though a funded debt is not in the first instance, an absolute increase of Capital, or an augmentation of real wealth; yet by serving as a New power in the operation of industry, it has within certain bounds a tendency to increase the real wealth of a Community, in like manner as money borrowed by a thrifty farmer, to be laid out in the improvement of his farm may, in the end, add to his Stock of real riches.

-Alexander Hamilton, "Report on Manufactures," December 5, 1791

 


 

Neither will it follow, that an accumulation of debt is desireable, because a certain degree of it operates as capital. There may be a plethora in the political, as in the Natural body; There may be a state of things in which any such artificial capital is unnecessary. The debt too may be swelled to such a size, as that the greatest part of it may cease to be useful as a Capital, serving only to pamper the dissipation of idle and dissolute individuals: as that the sums required to pay the Interest upon it may become oppressive, and beyond the means, which a government can employ, consistently with its tranquility, to raise them, as that the resources of taxation, to face the debt, may have been strained too far to admit of extensions adequate to exigencies, which regard the public safety.

-Alexander Hamilton, "Report on Manufactures," December 5, 1791

 


 

There are respectable individuals, who from a just aversion to an accumulation of Public debt, are unwilling to concede to it any kind of utility, who can discern no good to alleviate the ill with which they suppose it pregnant; who cannot be persuaded that it ought in any sense to be viewed as an increase of capital lest it should be inferred, that the more debt the more capital, the greater the burthens the greater the blessings of the community.

-Alexander Hamilton, "Report on Manufactures," December 5, 1791

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