A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson.

• Author: Edwards, Chris
• Position: Book review

A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson

Carl Lane

Yardley, Pa: Westholme Publishing, 2014, 265 pp.

In recent years, federal government debt has soared to the highest levels in our peacetime history. In other countries, rising debt has precipitated economic crises, but these foreign experiences have not yet prompted U.S. policymakers to focus on debt reduction. While policymakers often express concern about the debt, other fiscal priorities always seem to take precedence.

American leaders used to be more troubled by government debt, and during various periods they worked to reduce it. One of those periods was the 1820s and 1830s, as described by Carl Lane in A Nation Wholly Free: The Elimination of the National Debt in the Age of Jackson. Lane is a professor of history at Felician College in New Jersey, and he provides an engaging and detail-oriented account of fiscal policy in the early Republic. Debt reduction was a key policy focus at that time, and it influenced many other issues, including tariffs, internal improvements, and the Second Bank of the United States.

America was born with a substantial load of government debt, which had been issued to fund the Revolutionary War. Following Alexander Hamilton's plan, Congress passed a law in 1790 that transferred state debts to the federal government, creating a total federal debt that year of $75 million. Hamilton and the Federalists were in no rush to pay down the debt, and by the end of the Adams administration in 1800, it had edged up to $83 million.

Thomas Jefferson assumed the presidency in 1801 promising to end internal taxes, restrain spending, and pay down the debt. In a 1799 letter to Elbridge Gerry, Jefferson said, "I am for a government rigorously frugal and simple, applying till the possible savings of the public revenue to the discharge of the national debt." Jefferson followed through on his tax promise, kept total spending roughly flat, and was able to pay down a substantial part of the debt, even though the Louisiana Purchase had cost $15 million. Federal debt fell from $83 million in 1801 to $57 million by 1809.

After reaching a low of $45 million in 1812, federal debt soared to $127 million by 1816 as a result of the War of 1812. Jefferson's animosity toward government debt, however, had a lasting influence on policymakers. By the Monroe administration (1817-1825), debt was falling again as the government began running surpluses in...