Hamilton’s Blessing: The Extraordinary Life and Times of Our National Debt

ISBN: 0140270159
ISBN 13: 9780140270150
By: John Steele Gordon

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About this book

Measured at the staggering amount of $5.1 trillion (and growing every day) the national debt is unfathomable to most Americans. What we may not realize is that the United States was born out of debt. After the Revolution, the brilliant Alexander Hamilton was less interested in paying down the Revolutionary war debt than in using it to create a vibrant national economy. "If it is not excessive, " he declared, "a national debt will be to us a national blessing." In a fascinating narrative brimming with colorful characters, historical accidents, and American ingenuity, business historian John Steele Gordon leads us on a tour of an American institution whose largely unknown story has been integrally entwined with our country's destiny. At key points in U.S. history, Gordon shows how the national debt has been a potent instrument of fiscal policy in keeping the world safe for democracy. But how much debt is too much? At a time when we despair of balancing even a single year's budget, Hamilton's Blessing provides much needed perspective - and hope. Author writes the "Business of America" column in American Heritage magazine and is heard often on public radio's "Marketplace."

Reader's Thoughts

Susan Hutchins

Excellent! Very understandable and helped me begin to understand our national debt. My son had to read it for his econ major in college and recommended it.

Maxo Marc

A good read but I got off the boat when they started talking numbers.

Jeffrey Williams

If you ever wanted to know about the history of the National Debt, here is your source. Gordon does a wonderful job bringing us through Hamilton's Sinking Fund, Biddle's Bank, the Jacksonian era, the Civil War, Jay Gould and the cornering of the gold market, through two World Wars up to our present day. He gives us a picture of the people who made the decisions which led to our massive debt and gives us satisfactory answers to their decisionmaking process. This is a must read for every budding economist - amateur and professional - who wants to understand why the debt is so important to our lives. Kudos to Gordon for another job well done.


A historian writing about economic theory. The historical perspective of the national debt is certainly interesting. His proposed solutions to the current debate seem problematic. Lost credibility with me when he claims Congress went wild when it became dominated by "ordinary" citizens instead of the aristocracy of old. It became too easy to spend someone else's money. This ignores the fact that in 2011 there are 261 millionaires in Congress and they are paid $174,000 per year. Hardly "ordinary" to me.

Rachel Terry

With budget deficits and the national debt in the news all the time, I thought I'd do a little reading to get caught up. The book starts at the beginning of the country and follow the national debt through the years, explaining its ups and downs and offering mini bios along the way. It helped put the debt into perspective for me. It also made me a little depressed. This book was published in 1997, and the author ends the book on an optimistic note, but many of the things he warns about are happening right now, this month, this week, and it's worrisome, to say the least. After reading this, I'm more concerned about the budget deficit than the national debt because the problems are more immediate. I wonder if we'll ever elect a politician gutsy enough to tackle these problems head on. I kind of don't think so. Nevertheless, it's a readable book, and I think I'll look into some of his other more recent books.

Elizabeth Theiss

Who knew a book about the history of the public debt could be so fascinating? Scholarly but accessible and enjoyable for the general reader, this brief book gives historical perspective to the problem of budget balancing.


Most of us only know Alexander Hamilton as the man whose face graces our ten dollar bills. Or, perhaps we know him as the unfortunate answer to the Jeopardy question: “Who was on the wrong end of a duel with Aaron Burr?” That is too bad because, as this fascinating book makes clear, he really should be most famous for being the architect of the United States’ first set of economic policies in his role as the country’s Secretary of the Treasury. In particular, it was Hamilton who crafted a system of issuing debt at a federal level to replace the less efficient method of relying on the states to serve that role.“Hamilton’s Blessing” is not really the story of any one man though; rather, it is the history of how America’s national debt developed and has changed over the past two centuries. If that sounds like a dull, painful reading experience, rest assured that it is not. In the hands of a talented historian like Gordon, this is a lively tale replete with myriad accounts of visionary economic insights as well as catastrophic political blunders. A key focus of the narrative is how the collective attitude in the United States regarding the act of borrowing money to pay our bills, which has been both the blessing that Hamilton promised and the curse that many others predicted, has evolved over time.Today, things like income and inheritance taxes, the existence of a central bank, and a federal government that borrows more than it can ever hope (or intend) to repay are taken as given. However, these are relatively recent developments; a tax on personal income in the United States was introduced to help pay for the Civil War and only became a permanent fixture shortly before World War I. Also, for the country’s first 150 years, lawmakers followed Adam Smith’s prescription of paying back in good times what we needed to borrow strategically in the bad (e.g., wars, economic depressions). Starting in the 1940s, however, that attitude changed dramatically as John Maynard Keynes’ theory of managing the economy with active deficits began to take hold. That path, justified by the belief that the old pay-as-you-go mentality is irrelevant because “we are just borrowing from ourselves,” is the one we are still on today.It has been said that there is no such thing as a pure economy—only political economies exist. The author emphasizes this point by noting that, removed from the discipline of having to balance the national budget, the last several generations of politicians have lacked the resolve to fix our convoluted tax system or cut federal spending at appropriate times. As a consequence, the national debt has now reached levels that would be incomprehensible to someone living just 50 years ago. While it is occasionally number-heavy and a little dated, this book provides the reader with both a superb historical context and sobering vision of our economic future.


This is a "must read" for anyone who really believes that the Obama Administration's program of increasing the deficit as well as the debt is a good thing. For all those who know that it isn't, you should read this as well. My recommendation - read it and pay attention!


More interesting nonfiction train reading


A strong book overall though the wheels fell off towards the end and potentially some political bias insinuated itself into the text. The premise is pretty amazing and yet totally logical: debt is good. Debt is instant liquidity and liquidity to people/institutions/nations who then have a vested interest in the success of the US. Selling debt is instant capital. And stop comparing 'how you run a household' to how the government runs. That's infuriatingly oversimplifying. Can your household borrow money at 0%? Mine can't. In fact, the US government at various points in time has been able to borrow money at negative interest and, literally, profited from borrowing. Also, keeping the household thing running, the US can borrow from itself in a way that a household cannot with any sustainability. That's worth emphasizing. There are some great points here regarding incentives and the tax code. You'd be hard pressed to find a bigger fan of progressive tax rates than me but Gordon makes a solid case that lowering taxes on the wealthy does demonstrably make the very rich stop taking advantage of loopholes and every time the higher tax rates are lowered, tax revenue increases as the rich stop bothering with the tax loopholes of occasionally dubious legality. Also, the 1990 tax on luxury boats and airplanes was predicted to bring in $16 million but brought in $58k as people just simply stopped buying them. Predicting peoples' reactions to incentives isn't an easy feat. I like that he points out the fallibility of these predictions if only anecdotally. I had a few issues with him, some significant. One semantic issue was him describing Medicare, Medicaid and Social Security as "entitlements." A writer on this topic should know that programs that are means-tested (Medicaid) are not, by definition, "entitlements." Sloppy work there. Also, he gets really haphazard towards the end and dismisses Clinton's surplus as, "An artifact of phony accounting," and he does previously describe some weaknesses with how these things are calculated but it's sloppy for Gordon not to go into his specific objections here. Again, a few pages later discussing the Recovery Act he mentions "fundamentally dishonest federal accounting rules," without bothering to go any further. Also, he cherry-picks the one scoring of health care reform that didn't take into account revenues (from the CBO) and showed it added to the deficit/debt, despite every subsequent (and the final scoring) showing otherwise. That's actually pretty unforgivable cherry-picking. Another big issue at the end is the utter lack of discussion regarding China. Everyone wants to know what it means that they buy so much of our debt and how the interplay of the Yuan illegally tied to the dollar affects these arguments and China comes up not at all. All that said, still very informative. Just feels very rushed and political at the end.


Why deficits are necessary, from the central founder of such matters in America.


Interesting information about the history of the US national debt. Very readable style. Unfortunately, the end is obviously dated now (though it makes one wonder where we might be as a nation now if some of the author's suggestions had been applied in the mid-90s). I liked it.

Viktor Nilsson

I'm always excited to read historical accounts on financial matters, mostly because it is so often ignored - both within the field of history and the field of finance. The first few chapters of the book did not make me disappointed - a colorful description of the debt got started and developed. From loans to bonds, and related issues such as the 3 historic central banks and what has constituted the government's spending and income.After that, the author seems to forget that he's an historian and starts talking at great length - half the book - about specific details in the tax code, entitlement programs etc. And very much not from a historic point of view, rather getting in to modern political debates. And he starts getting very opinionated, which should not be the purpose of the book.The first few chapters are good, but you can skip the rest. I hope to find better books on this issue.

Erik Potter

Short and succinct, it leaves you wanting more (in a good way). The biggest flaw is it's out of date, written in 1997.

Tyler Beaulieu

As a politically motivated individual who has little or no interest in economics, this book was a very enlightening take on the history of the U.S. national debt.

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