For over 200 years, the United States of America has been able to grow, prosper, and develop into one of the most powerful nations today. Not only did the country attain this type of status from a military viewpoint, but from an economic perspective as well. (). (). No matter what kind of economic climate that America faced, it will always have a lasting effect on its citizens.
From the United States’ very beginning, it had to deal with financial troubles. While patriots were fighting for independence against the British, Congress needed to fund in order to continue their revolution. At first they decided to print more money, even though it eventually led to hyperinflation. Printing more money seemed a more viable solution than to tax the very people fighting over the same issue. Since printing was not enough for Congress’ spending, they took out loans from European countries like France, Spain, and the Netherlands. Once the American Revolutionary War ended in 1783, the newly created U.S. government under the Articles of Confederation had to pay off around 75 million dollars to various countries, but had difficulties doing so since the Articles of Confederation did not give Congress the power to levy taxes. Due to the lack of payment at the time, the US had to stop “payments of interest to France in 1785” and was forced to default on others loans in the future (). At this time, the new nation’s debt-to-GDP ratio reached 30%. As a result of taxing issues, along with other domestic and foreign problems, the U.S. Constitution was created in 1789 to completely replace the Articles of Confederation. It would not be until one year after the U.S. Constitution was signed that the government was able to begin to pay off its debts. (transition sentence).
The United States was able to become more economically sound with the turn of the century. By the start of the 19th century, the United States was able to settle its debts with France. Under President Jefferson, the national debt significantly decreased, as well as government spending. A portion of the spending cuts were from the military as he decreased the size of the federal armed and naval forces, even though a war against the Barbary pirates occurred during his administration. The spending also included the Louisiana Purchase of 1803, which was easier to buy with the country’s improved credit in European markets.() During his presidency, the debt-to-GDP ratio shrunk to below 10%. With all of the financial work that Jefferson put in, it became reversed when the United States fought England a second time during the War of 1812. (http://www.downsizinggovernment.org/thomas-jeffersons-sequester) (maybe talk about economic growth if any) (transition sentence)
By 1961 the American Civil War was underway, but both sides had concerns on paying for it. Even though both the Union and Confederacy raised funds through an assortment of borrowing, printing money, and...