Week of September 28 - October 2
Week of September 28 - October 2 EC 2113
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This 2 page Class Notes was uploaded by Grey Garris on Saturday October 3, 2015. The Class Notes belongs to EC 2113 at Mississippi State University taught by Heriberto Gonzalez Lozano in Summer 2015. Since its upload, it has received 46 views. For similar materials see Principals of Macroeconomics in Economcs at Mississippi State University.
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Date Created: 10/03/15
Vl Securing the Republic Questions Facing the US in 1789 A B C D Would the new national government be strong enough to deal with the remaining problems left by the war Would the US be able to command respect as an independent nation What defined the relationship between the government and its citizens Would political parties emerge and would the government be able to withstand their infighting ll Launching the New Government A First President The first President had the extraordinary job of bringing legitimacy to the nation Their leadership would show the world how the nation was going to be George Washington was unanimously approved as the first President of the United States He and the new government inherited what can only be described as an absolute chaos situation but they were adamant about maintaining the rules and laws of the Constitution to fix it First Congress The first thing Congress ever did was raise taxes to pay off the debt from the war This was was followed by the Judiciary Act of 1789 which established the structure and functioning of the lower Courts They also created much of the Executive Organization namely the Cabinet and also the Departments of State Treasury and War III Hamiltonian Federalism A Alexander Hamilton as the Secretary of Treasury 1 Alexander Hamilton was born in the British West Indies but violent storms forced him to go to the colonies There he was very poor initially but he was brilliant and married into one of the wealthiest families in New YorkWhen he became the Secretary of the Treasury he was granted what was at the time possibly the most important position available 2 Purpose He had an absolute obsession with the centralization of power in England and viewed it as the epitome of how the government should function He believed that the states should be nulled and that a central US governmental entity was necessary to the survival of the nation 3 Philosophy Hamilton had no faith in the common man and even detested the lower classes that he had once been a part of He was an adamant elitist and gladly told everyone else this He thought that only the wealthy were valuable to society and considered the poor to be part of the mob He said that the government could capitalize on the natural greed of humanity by turning that private greed into public good with a capitalist system Report On the Public Credit 1790 The government was in great debt and the money issues were rampant so Congress ordered Hamilton to propose solutions to the problem The only problem was that Hamilton knew absolutely nothing about what he was doing and relied solely on his own brilliance 1 Decisions Federal Government would absorb the debts of the States the US would establish credit as he viewed debt as something not necessarily bad Funding amp Assumption if the debt doesn39t have to be paid off at once then use taxes to pay off the interest and fund the debt wanted a stable currency and market and suggested that the US should become an industrial economy 2 Reaction James Madison the then Speaker of the House was fearful of the massive increase in power that Hamilton wanted the government to have and started to side with the States and Thomas Jefferson Madison could ve held the report up but he understood the need for a strong national government and allowed the Report to circulate through Congress They passed the resolutions Hamilton made on the grounds that the national E government would be moved out of the North from New York at the time to its current location in DC Report on the National Bank 1790 The question of who would manage the money came to light and very few people trusted the idea of banks at the time Hamilton s solution was the National Bank to be chartered by the government run by citizens and centered in the North There was immediate uproar in opposition to this as it was believed that doing this might be Unconstitutional The problem was that the Constitution didn t say you could do it but it didn t say that you couldn t This led to a debate over Constitutional Interpretation 1 The difference between the two factions in this debate was of Strict and Broad Interpretation The Strict view stated that the Constitution must be followed directly along its very narrow scope while the Broad side said that some assumptions can be made The two sides were not willing to cooperate until Hamilton used Article I Section 8 to convince George Washington to his side who then promptly twisted a few arms in Congress to get the proposition passed Report on Manufactures 1790 Hamilton s ambition did not stop with the establishment of the National Bank He wanted to make sure that the US became an industrial nation because he hated Agrarian society and used the powerhouse explanation to try and convince Congress that his was a good idea They did not agree with him on this point and refused to allow the government to support big business Results of the Hamilton Programs The US became financially stable the federal government had achieved the significant national power it required and the Federalist Party had been founded IV Jeffersonian Republicanism 89 92 A Mr Madison s Party Jefferson and Madison organized the DemocraticRepublican party together The party consisted of those who were concerned with the states inability to stop the growing power of the national government Jefferson 1 Political Philosophy Jefferson was very much against the increasingly strong federal government He did not agree with the idea of the National Bank at all and wanted very much to lessen the amount of federal power being given to the government 2 Agrarianism In the aspect of the US future he was the opposite of Hamilton Jefferson despised the growing market and industry itself and preferred that the US remain in a farm based economy 3 Strict Constitutional Interpreter Jefferson believed in keeping rigidly to the letter of the Constitution C Republican Party The DemocraticRepublican party became the Republican party under Jefferson
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