As we move closer to intentionally jettisoning the full faith and credit of the United States and eyeing the pulse of the bond market, we shouldn't forget one salient fact. The centrality of debt holders in our constitutional order isn't a bug, it's a feature. Indeed, the national debt -- created through the federal assumption of state war debts -- was created to do precisely this: get the holders of bonds, necessarily wealthy and powerful people, to have a vested interest in the fixity and stability of the federal government.And yeah, that makes sense to me. I get it. Now, I'm assuming that Josh got that from someone else and this represents some known thing that Hamilton intentionally did for this reason; so if that's not the case and someone just made it up, it's somewhat less impressive.
But all the same, it's an excellent theory to explain why our system works as well as it does. Because one big problem with democracy, obviously, is that without a common bond to tie people together, you'll quickly find that the various interest groups will tear the things to shreds vying for power. But as long as you find some way to get people's interests vested in the common good of our country, they'll still have a common purpose to move towards.
And our problem right now is that conservatives have been fed such a long stream of delusional reality that they genuinely don't know what's really going on at all. And while that's been a problem for a long time, thanks to Fox News and the rest of the echo chamber, it's all any of them can hear and they're all getting off of their own supply.
But if we can ever convince them that we all have a common goal, and explain to them how real economic and financial theories work (ie, explain liberalism); we can get back on the right path towards greater stability and understanding. Culture wars suck, but things have gotten a heckeva lot worse now that they've started dabbling in economic theory.
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