Les États-Unis naguère, l'Europe aujourd'hui. Conférence Nobel prononcée à Stockholm le 8 décembre 2011

Thomas Sargent and Jacques Le Cacheux

Revue de l'OFCE, 2012, vol. N° 126, issue 7, 5-56

Abstract: Under the Articles of the Confederation, the central government of the United States had limited power to tax. Therefore, large debts accumulated during the US War for Independence traded at deep discounts. That situation framed a US fiscal crisis in the 1780s. A political revolution ?for that was what scuttling the Articles of Confederation in favor of the Constitution of the United States of America was?solved the fiscal crisis by transferring authority to levy tariffs from the states to the federal government. The Constitution and acts of the First Congress of the United States in August 1790 gave Congress authority to raise enough revenue to service a big government debt. In 1790, the Congress carried out a comprehensive bailout of state governments? debts, part of a grand bargain that made creditors of the states become advocates of ample federal taxes. That bailout created expectations about future federal bailouts that a costly episode in the early 1840s proved to be unwarranted. JEL codes: N21, N41

Keywords: American economic history; public debt (search for similar items in EconPapers)
JEL-codes: N21 N41 (search for similar items in EconPapers)
Date: 2012
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