The national debt is the amount owed by the United States Treasury to holders of bonds and notes. The net public debt is the amount owed to the public, as opposed to public agencies and trust accounts like Social Security.
The national debt began at zero under the new constitution in 1789, but the first Secretary of the Treasury, Alexander Hamilton, when he delivered his First Report on the Public Credit on January 14, 1790, proposed that the federal government should assume the obligation to repay not just the money borrowed by the continental congress to pay the Continental Army but $25,000 of state debts. Many suggested that the Continental Congress debt securities, which were being traded at a discount, should be repaid at a discount. Hamilton asserted that:
Every buyer therefore stands exactly in the place of the seller, has the same right with him to the identical sum expressed in the security, and having acquired that right, by fair purchase and in conformity to the original agreement and intention of the government, his claim cannot be disputed, without manifest injustice.
Patrick Henry was strongly opposed to Hamilton's suggestions, particularly the assumption of the state debts. He wrote a protest resolution, which was passed by the Virginia Assembly in December, 1790:
On the contrary they discern a striking resemblance between this system and that
which was introduced into England, at the revolution; a system which has
perpetuated upon that nation an enormous debt, and has moreover
insinuated into the hands of the executive, an unbounded influence, which
pervading every branch of the government, bears down all opposition, and
daily threatens the destruction of everything that appertains to English
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Quotes regarding National Debt.
By Alexander Hamilton A national debt, if it is not excessive, will be to us a national blessing. Circa 1790 By Thomas Jefferson The principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.
Around 1790 By Herbert Hoover Blessed are the young, for they shall inherit the national debt. Speech in 1936. At that time, the federal debt was around $35 billion. It is now around $14 trillion. By George W. Bush My plan reduces the national debt, and fast. So fast, in fact, that economists worry that we're going to run out of debt to retire. Radio address, February 24, 2001 By John Adams The consequences arising from the continual accumulation of public debts in other countries ought to admonish us to be careful to prevent their growth in our own. First address to Congress, 1797