Hugh Hewitt: The Grand Bargain of 1790

Jon Meacham’s wonderful new biography, Thomas Jefferson: The Art of Power, has within it four pages of particular interest to today’s governing class in D.C.

In late April 1790, the new United States was poised on its first fiscal cliff, a massive public debt held by many but not all states, dating from the Revolutionary War. Some states had acted responsibly toward their obligations. Others had not. The former did not want to bail out the latter, and the genius of the young republic’s finances, Treasury Secretary Alexander Hamilton despaired of finding some way of persuading the recalcitrant to agree to have the federal government assume the debt and lay on the taxes and tariffs necessary to pay it off responsibly.