Great article in Bloomberg on early U.S. history and how the Europeans failed in designing their currency--excerpt below:
Why the Early U.S. Didn't Go the Way of the Euro: Echoes - Bloomberg: "We usually don't think of the U.S. as a monetary union, but early in its history it essentially was. Unlike the crisis-wracked euro zone, the dollar zone survived its first few decades without a major crisis, providing the fragile young republic with a period of relative stability during which it began to congeal culturally, economically, politically and militarily. European policy makers hoped that the euro would serve as the unifying and integrating force of the European Union much as, they believed, the dollar had for the early U.S. What the Europeans failed to appreciate was that early America's real glue was not its dollar union but its fiscal one." . . . "So what kept the new nation together? First-rate economic statesmanship, not a shared unit of account. In the early 1790s, Treasury Secretary Alexander Hamilton defined the dollar in terms of gold and silver, but more significantly he established the taxes and institutions (collection system, central bank) that made it possible for the national government to service its own debts and those of the states. Assumption of state debts, as it was called, was positioned not as a bailout but rather as a way of ensuring that each state shouldered the burden of the Revolutionary War equally. Just as importantly, assumption made bondholders beholden to the national government, cementing the union together as Hamilton predicted it would. The U.S. Constitution effectively prevented state governments from endangering the monetary union by prohibiting them from issuing money or making anything other than gold or silver a legal tender. The Constitution didn't enjoin the states from incurring debt but -- with the exception of assuming war burdens -- the early national government refused all responsibility for state debts. . . "
Tweet Follow @johnmpoole
The Big Picture
Financial Crisis - The Telegraph
JohnTheCrowd.com | The Sailing Website
Craig Newmark - craigconnects
- ► 2015 (131)
- ► 2014 (368)
- ► 2013 (380)
- How to Remove Your Google and YouTube Search Histo...
- Romney Rolls - "Super Tuesday" Next Week
- To Die like a Doctor: a Graceful Death
- GOP: a Cup of Crazy
- Ed Koch: 'Santorum is nuts'
- Federal money driving up the cost of college for s...
- The Greek Sustainability Report and Reaction & Ana...
- Eurozone: dead end zone?
- Ann Coulter takes Republicans to the woodshed
- Romney's right: Spending cuts, without pro-growth ...
- For Republicans, it's "self-destruct" time
- Greece: a return to the drachma?
- Germany's plan for Greece to leave the euro
- Why even corporate loopholes have to go
- 2012: The election is over - Obama won!
- Vote for Santorum and elect Obama!
- Greek Drama
- Greece: the euro has always been a flawed currency...
- Living in an Age of Digital Espionage
- Greece faces death by a thousand cuts
- Privacy: Something Lost, Nothing Gained?
- Greek lawmakers approve austerity bill as Athens b...
- Iowa’s joke on all of us
- Obama's biggest vulnerability is not Obamacare
- Greek Default is not End of the World
- Obama’s greatest vulnerability as a leader
- Romney and Tax Policy: hardly bold enough
- Romney needs to get serious and credible
- Punk Economics: Lesson 1 [video]
- "That’s what people elected you to do"
- Caveat Romney: Obama Campaign on Lookout
- Romney Country
- Nevada: different state, same issues, same winner
- More on the Obama "Fudge" Jobs Report
- The "Obama Fudge Jobs Report"
- January jobs report--"Washington Fudge"
- Why the Early U.S. Didn't Go the Way of the Eurozo...
- Eurozone: Reality Check
- Florida picks a winner: Mitt Romney
- ▼ February (39)