Andrew Jackson Economics

[Puppycow]

He reminds me of Ron Paul. Hated debt and the banks, loves hard money. Abolished the central bank. Paid off the national debt. Required all government all government land sales to be done with gold or silver. A major depression followed.

When The U.S. Paid Off The Entire National Debt (And Why It Didn't Last)

On Jan. 8, 1835, all the big political names in Washington gathered to celebrate what President Andrew Jackson had just accomplished. A senator rose to make the big announcement: "Gentlemen ... the national debt ... is PAID."

That was the one time in U.S. history when the country was debt free. It lasted exactly one year.

 

[CORed]

He reminds me of Ron Paul. Hated debt and the banks, loves hard money. Abolished the central bank. Paid off the national debt. Required all government all government land sales to be done with gold or silver. A major depression followed.

When The U.S. Paid Off The Entire National Debt (And Why It Didn't Last)

This is what amazes me about the gold bugs. There are certainly some problems with our current economic setup, but they propose to replace it with one proven not to work.

 

[psionl0]

After Andrew Jackson paid off the debt:

The state banks went a little crazy. They were printing massive amounts of money. The land bubble was out of control.

Andrew Jackson tried to slow everything down by requiring that all government land sales needed to be done with gold or silver. Bad idea.

It wasn't paying off the national debt that caused the problems, it was the state banks undermining Andrew Jackson's efforts.

Andrew Jackson didn't realize at the time that banking reform meant more than just ditching a central bank. A golden opportunity to reform the monetary system was missed.

 

[Puppycow]

After Andrew Jackson paid off the debt:It wasn't paying off the national debt that caused the problems, it was the state banks undermining Andrew Jackson's efforts.

Andrew Jackson didn't realize at the time that banking reform meant more than just ditching a central bank. A golden opportunity to reform the monetary system was missed.

Yeah, I don't really understand how the monetary system worked in those days, but it seems from the article that each state had its own government-controlled bank, so there was no centralized monetary policy (after the national bank was abolished).

I agree that paying off the national debt itself didn't cause the problems, but it seems that it was one part of an economic philosophy that did cause the problems. Letting each state do its own thing in this case led to problems, and requiring gold or silver to be used to purchase government land exacerbated the problem because it stopped economic expansion.

Putting the land into the hands of people who would improve the land and make it productive was what had been driving the economy, and it came to a screeching halt. In the Homestead Act, the government basically gave land away for free if people would improve it, and this led to economic expansion. What Jackson did was basically the opposite of the Homestead Act. He made it more expensive than it had been and thereby choked off economic expansion.