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An American History Lesson for Europe

You can draw your own conclusions and parallels with Europe today, and the U.S. Federal Government bailout of the States in 1789, and its refusal to do so again in the 1840s !
Thomas Sargent
WSJ, February 3, 2012

"Our federal government refused to bail out the states in the 1840s, thus preserving their fiscal independence."

"In 1789, the political price for our federal constitution included a bailout of the 13 indebted states. But it was by refusing to bail out the states a second time in the 1840s that the United States preserved its federal system, with substantial fiscal independence for state governments. Facing a similar moment, Europe might learn from our experience.

The 1789 bailout was part of a grand bargain designed by Alexander Hamilton to convert the creditors of the 13 states into advocates of a stronger federal government—one having the ability to raise all revenues required to service the large debts that ..."

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