Toward a New Global Economy
The Global Economy Series
by Timothy Williamson
30 Dec 2010
“There is a synergistic amplification of economic power and influence when individuals, groups of individuals, states or groups of states join together to form a single currency under the management of a strong central bank.” Timothy Williamson, 24 Dec 2010, Friday, 23:30 local time (0530 GMT)
This is the basis for the economic success of the US since the idea was first presented to the US Congress by Alexander Hamilton in 1790. At that time, the states used their own currency, operated state banks and controlled their own fiscal and monetary policies as separate and distinct sovereign states within a weak federal system. The state economies and the overall economy of the new nation were in dire straits after the Revolutionary War, with the federal government owing what would be equivalent to $1.4 trillion dollars in today’s money. The resulting national economic chaos could only be repaired when the states acknowledged that they could not independently solve their economic challenges. The nation was very near the point of actual and real collapse because of the economy. In other words, the economies of all the states had become irreversibly interdependent and connected. People, businesses and jobs could easily move from state to state within the nation. The cities were becoming centers for textile and manufacturing plants, and the rural areas provided the food, tobacco and whiskey. Businesses would move from one place to another depending upon resource and labor costs and availability. Hamilton knew that the only real viable solution to stabilize then grow the state economies out of pending demise was for the federal government to take on the states debt through the issuance of bonds to be held by those states and individuals so the they thereby had cause to support the success of the nation. Hamilton's plan created the first national central bank of the US, and established a single currency for the nation. When his plan was implemented in 1791 the economy, the creditworthiness and fiscal stability of the US almost immediately improved.
By operating under a stronger federal system with a single central federal bank in control of monetary policy and a single national currency, the overall economy of all the states improved dramatically above what they could have done on their own - if they could have survived the economic meltdown in the first place. Of course, every time the political winds shifted in opposition to the central bank, shutting the bank down, the economy collapsed. Every time the federal central bank was re-chartered, first in 1791 for twenty years, then after the War of 1812 in 1816 for twenty more years (Pres. Jackson defunded the central bank in 1832, a real estate bubble had also occurred, and the economy suffered for years afterward), then Lincoln had to fund the Civil War debt by creating the First National Banking system in 1863, and by 1913, after many turbulent years of the Long Depression starting in 1873, problems in 1899, the Federal Reserve was created to further stabilize the national economy, the economy grew. The people prospered. Businesses expanded, and innovation and creativity reigned.
There is obvious and historical proof that when states join together in recognition of the mutual and inescapable connection each has with the other, then there an amplification of economic strength and influence. The same will be true on a global scale. We do not need to run from this fact, but rather we should embrace the coming change. We can either be part of the global solution and help create an effective single global currency, where no nation has its own currency, and we have a strong global central bank or we will get what happens to us as we continue to decline in the long term. As has been proven in US history, such a union will make each member stronger than we could be independently.
Timothy Williamson
globaleconomy101@gmail.com
The Global Economy Series
by Timothy Williamson
30 Dec 2010
“There is a synergistic amplification of economic power and influence when individuals, groups of individuals, states or groups of states join together to form a single currency under the management of a strong central bank.” Timothy Williamson, 24 Dec 2010, Friday, 23:30 local time (0530 GMT)
This is the basis for the economic success of the US since the idea was first presented to the US Congress by Alexander Hamilton in 1790. At that time, the states used their own currency, operated state banks and controlled their own fiscal and monetary policies as separate and distinct sovereign states within a weak federal system. The state economies and the overall economy of the new nation were in dire straits after the Revolutionary War, with the federal government owing what would be equivalent to $1.4 trillion dollars in today’s money. The resulting national economic chaos could only be repaired when the states acknowledged that they could not independently solve their economic challenges. The nation was very near the point of actual and real collapse because of the economy. In other words, the economies of all the states had become irreversibly interdependent and connected. People, businesses and jobs could easily move from state to state within the nation. The cities were becoming centers for textile and manufacturing plants, and the rural areas provided the food, tobacco and whiskey. Businesses would move from one place to another depending upon resource and labor costs and availability. Hamilton knew that the only real viable solution to stabilize then grow the state economies out of pending demise was for the federal government to take on the states debt through the issuance of bonds to be held by those states and individuals so the they thereby had cause to support the success of the nation. Hamilton's plan created the first national central bank of the US, and established a single currency for the nation. When his plan was implemented in 1791 the economy, the creditworthiness and fiscal stability of the US almost immediately improved.
By operating under a stronger federal system with a single central federal bank in control of monetary policy and a single national currency, the overall economy of all the states improved dramatically above what they could have done on their own - if they could have survived the economic meltdown in the first place. Of course, every time the political winds shifted in opposition to the central bank, shutting the bank down, the economy collapsed. Every time the federal central bank was re-chartered, first in 1791 for twenty years, then after the War of 1812 in 1816 for twenty more years (Pres. Jackson defunded the central bank in 1832, a real estate bubble had also occurred, and the economy suffered for years afterward), then Lincoln had to fund the Civil War debt by creating the First National Banking system in 1863, and by 1913, after many turbulent years of the Long Depression starting in 1873, problems in 1899, the Federal Reserve was created to further stabilize the national economy, the economy grew. The people prospered. Businesses expanded, and innovation and creativity reigned.
There is obvious and historical proof that when states join together in recognition of the mutual and inescapable connection each has with the other, then there an amplification of economic strength and influence. The same will be true on a global scale. We do not need to run from this fact, but rather we should embrace the coming change. We can either be part of the global solution and help create an effective single global currency, where no nation has its own currency, and we have a strong global central bank or we will get what happens to us as we continue to decline in the long term. As has been proven in US history, such a union will make each member stronger than we could be independently.
Timothy Williamson
globaleconomy101@gmail.com
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