Emeritus. Over tong to turn it the man who will introduce our chairman of the board. [applause] rand hello, everyone. See so many people celebrating Alexander Hamiltons 261st birthday. The are honored to be celebrating we are honored to be celebrating with the National Park service. They have interpretive programming there. David andanks to justin and the museum of American Finance staff for hosting. This is the seventh year in which we of partnered with exhibits and we think the museum for that. Cspans American History television continues its in sharing the key historical record nationwide. Three initiatives have happened in the last year in part of celebrating hiltons birthday to ensure a more accurate understanding of who he was. Birthday. Ons philadelphia,n in that had all of the Founding Fathers except for him, that has been remedied. Of lastmoment in june year, hamilton was inducted into the new york state writers hall of fame. And major news for the first time to be announced publicly. New discoveries related to Alexander Hamiltons life are by being posted Weekly National hamilton scholar michael newton, including the oldest known hamilton documents and 1769. 8 hamiltons biological details of hamiltons maternal grandfather are available. Croix, a 10yearold Alexander Hamilton was introduced to dueling. Week, there was a detailed sourcing of funding of hamiltons education in new jersey and new york. It was not because of the hurricane letter he wrote. Not a reference. A reverend. New discoveries are going to be going on for months and months. I want to encourage those of you at home in upper manhattan to see it. It has been restored. Our speaker, now. Sylla is Professor Emeritus of economics at the stern school of business at new york and if you knew new york university. He was Henry Kaufman professor of the history of financial institutions. Is also Research Associate of the National Bureau of economic research. Ba,professor received his ma, and phd from harvard. Focuses on the financial history of the United States and comparative contexts. He is the author of a number of including Alexander Hamilton the illustrated l. Ography, beautifu pictures help us understand the financial dimension of it. The doctor will be signing those after the question and answer today. He has also written the American Capital markets 18461914. A book onauthored Alexander Hamilton that is going to be available this year. He coedited the Economic Policy as well ass, articles, essays, and reviews on business, economic, and financial history. Is a former editor of the journal of economic history. He has served as the chairman of and in thef Trustees Association of quantitative economic historians. He has served as president of the Business History conference, the leading professional , which presented their Lifetime Achievement award to him in 2011. Currently serves as chairman of the board of trustees of the museum of American Finance. E are privileged today too. About hamilton on financial responsibility, with one of our nations foremost financial and economic historians. Ladies and gentlemen, dr. Richard sylla. [applause] sylla thank you for that kind introduction. For coming outu on hamiltons 261st birthday. Society and the museum for sponsoring the event. It is an honor to be here. My topic is timely. Congress passed a tax cut, that is estimated will add . 1500,000,000. 5 trillion dollars to the national , my topic is hamilton on fiscal responsibility. Merits ofill be the the recent tax cut, and i think there are some, there is little regard theton would law as not passing the test of fiscal responsibility. Hamilton would regard many of the fiscal policies and some of the monetary policies of the past halfcentury, the middle of 1960s, as not passing the fiscal and monetary responsibility tests as he defined them in the early to mid1790s, during and after his tenure as our first secretary of the treasury. There is probably a good site to that good side to that. Ago, theore 50 years first part of our history, maybe the policies would have passed hamiltons tests. A matter of your arithmetic, but you may be surprised when i tell you, i have lived through slightly more than a third of u. S. History. [laughter] since George Washington took office in 1789. Anyone in his or her late 70s could probably say the same thing. We have a young country. 1940 hasone born in lived 77 years. 1789, whenack to washington famously took the inh of office, what is it from it was 75 years 17901865 to the end of the civil war. I wasr 75 years until born. In 2015, i could say i lived through a third of u. S. History, under the constitution. Is 2017, and i have lived through more than a third of u. S. History. When i look at some of her monetary policies over the past i am talking about an era i witnessed in my adult historian, i have studied quite a bit of history in those 150 years when i wasnt around. Thethe most part, from 1790s into the middle of the of0s, was a long time responsibility as hamilton defined it. In 1965, whenge, i was a 25yearold phd student, our National Debt, the debt. Was 175 years of history 317 billion. That sounds like a pretty big number. Three times jeff bezos net worth. [laughter] it is a big number. I was 41 years old. In debt is 317 billion 1955. By 1981, it had traveled tripled to almost a trillion dollars. 1990, it tripled again, to 10 trillion 103. 2 trillion dollars. Again, 10 tripled trillion. 2008, it has doubled to more than 20 trillion in another nine years. 317 billion of National Debt is now over 20 trillion. Theou do the arithmetic, National Debt has increased 63fold from that time 50 years ago, when i was writing my phd thesis. I know some of you are thinking, there has been a lot of inflation. We will get back to that. I wont neglect to tell you something about debtgdp ratios later on. Mentioned the Alexander Hamilton illustrated biography that has been out able more than a year now. Little more than a year now. David and i have a book and alexanderht now, hamilton on finance, credit, and debt. Are a collection of at t documents hamilton 18 documents hamilton wrote over the course of his career related to finance. We have annotated every document as to why it is significant. Finance have not been featured as much as they might have been given. This was the importance of hamiltons work. Hardly anything he did was more important than his financial reforms. You want to read 10 pages of tax you wouldnt want to read the 10 pages of tax increases hamilton has in some of his documents. But we make it more interesting to a modern reader. We had to read what hamilton wrote very carefully. As i did so, it became even hamilton had these very definite ideas, clear and consistent ideas that started when he was very young, and he maintained him throughout his career. The first relevant document was in 1781, when he was a soldier marching in the military at yorktown. 1795, which is from he wrote a few months after he stepped down from treasury secretary. Analysis on the subject of fiscal responsibility and white proves difficult to achieve and how it can be it proves and why difficult to achieve and how it can be achieved came january 7 january 16, 1795, in an address to congress on public credit. Again,a private citizen having resigned as of january 31, 1795. This is a rather long report that deals with finance and debt management, technical subjects that are often ignored. I am sure there are a bunch of hamiltonians in the room. I am not sure how many of you have dwelled on this one longeral report technical report. Most people dont say a lot about it, this technical finance stuff. It proves that the charges of hamiltons political opponents, jefferson and madison and others, they charged that hamilton wanted to perpetuate and grow the National Debt and use it to manipulate congress or markets. Those were the charges leveled against him. Chargesort shows those were so much fake news. [laughter] i wrote about earlier this week and then i read the times, this morning. It said that fake news is the phrase of the year. A few years ago, it was selfie. Which i just use as an expression,s last years word or phrase. I have pages from the forthcoming book. I wanted to show you what hamilton actually said about the problems of fiscal responsibility that he faced. I wanted to show you what january actuallythis is from , 1795. Washington had just given the ande of the union address, there is nos, sentiment which can better deserve the serious attention of the legislators of the country than the one expressed in the speech of the president , which indicates the danger to every government from the progressive accumulation of debt. The tendency is perhaps the natural disease of all government. It is not easy to conceive anything more likely that could lead to great and convulsive revolution. One of the results of creating new causes of expenditure, i will paraphrase now, there is always new things to spend money on. Other hand, there is a general propensity and those he administer and those who administer the affairs of the to shift a propensity which may be expected to be strong. The more people get to vote for things, the more they will vote for, dont tax me. Lets borrow it. Hamilton says, to extinguish a debt which exists is almost always favored by public feeling and opinion. To pay taxes for one or the other purpose, the only means of you wantthe evil, if to extinguish the debt hamilton says, pay more taxes. More or lesss unpopular. Spending is popular. Paying taxes is unpopular. It is no uncommon spectacle to see the same ends clamoring for occasion of expense. They have to be in unison with the present humor of the theunity, claiming against public debt. For the production of it as an abstract basis. The government against every plan of taxation proposed to discharge old debts. This these un handsome arts. Artificial embarrassment in the way of administrators of the serves to promote the accumulation of debt by leaving that which at any time exists without adequate provision for its reimbursement. And preventing or delaying new energy when new taxes or expenses occur. The consequences of the public debt swells, and the burdens of the people gradually increase until they become intolerable. Breed state of things disorder in the whole political economy. There can be no more sacred obligation on the public agents of the nation than to guard with provident foresight against so mischievous a results. ,e refers to his earlier plan do you want to improve the which thesituation in United States stood at the time for extinguishing with reasonable whole or any the country, and fourlane the ndation and fourlane for laying immortality to public credit . He didnt get to his actual but that will become apparent in some of the earlier documents. Hamilton solution to the problem of fiscal responsibility is quite simple. Do is couple to borrowing measures with revenue measures to pay the interest of the money borrowed, plus a little bit more. With that little bit more, depending on how much more, it will allow the debt to be retired in some number of years. With the are all pretty familiar with this. Are all pretty familiar with this. Are paying extra to not just pay the interest on a mortgage, but to have it go away in 30 years. This is thedea was way the government should run itself as well. Revenues withng revenue measures couple borrowing measures with revenue measures to pay a little bit more. He wanted public credit to always be there when we needed it, when an opportunity arose, like louisiana, or to get through the civil war. Hamiltons fiscal responsibility can be traced to founding documents. 1781, he was would tenant colonel in the Continental Army marching toward yorktown. Colonel inieutenant the Continental Army marching toward yorktown. He was somewhere between new york and yorktown, marching with washingtons army. Soldier. 3yearold he is a 24yearold soldier. He is a 24yearold soldier. One of his insights, the great defect of the confederation, it gives the United States no property, no revenue, other than the means of acquiring it. He says that is a bad idea. Says, congress will do will depend on several grants at the expense of the federal government, and will neither have dignity or credit. Credit supposes specific and permanent funds for the payment of interest, with the moral certainty of the financial redemption of the principal. It will probably require more on account of the general dividends as a result of the past disorder in finance. It will appropriate funds for redemption of the principle of an indeterminate period. Hamilton is a 24yearold soldier, but he sounds like a professor. Key as a footnote to his thought he adds a footnote to his the germwhich contends of hiltons later thoughts of fiscal responsibility. Be a good restraint on the spirit of running in debt which cart which governments argue to be effective, to make it sufficient that they shall be funds for appropriate the payment of principal as well as interest. Sentence, that is hamiltons fiscal responsibility. When you borrow money for whatever reason, you should appropriate, increased taxes to pay the interest of the money you borrow, and a little but more so you can repay the principal at some point. Soldier,earold wondering what is going wrong with the countrys finances, he hits on the solution to the problem. Nine years later, in the famous report on public credit, january 1790, the original printing of it here is in the museums collection. There are several paragraphs to the idea of fiscal responsibility. This is a fairly wellknown passage. He says in the january 1790 report, persuasive as the and he is now first secretary treasury of the United States, persuaded as the secretary is that the proper funding will render it a national blessing, yet he is so far from exceeding the position in which this is sometimes laid down that public debt or benefit be positioned to reliable and dangerous abuse that the secretary arguably wishes to see it incorporated in the fundamental maxim in the system of public credit in the United States, that the creation of the debt should always be accompanied with a means of extremist meant. As the trues this secret for rendering public credit immortal. Which situation in in which there may not be an adherent to the maxim. At least he feels this may be attended by the United States and they may commence their measures for the establishment of credit. Report, he is calling for the assumption of state debts and restructuring of the National Debt. He reiterates what he cant do in a footnote some years earlier. Between 1790 and 1795, hamilton did not succeed in Getting Congress to adopt his measure for making public credit immortal. Money, butpropriated always bring in new taxes. The financial situation of the country had improved greatly. The United States began growing rapidly. The debt actually rose in 17901795. But i will tell you later it went down a great deal in terms of gdp ratio. The death rows able bit under hamilton, but the gdp for much faster. The debt actually rose, but many , and others, complained the debt was not being produced, even though it was their own behavior and the failure to adopt hamiltons regulations to make public credit in that was responsible. That wasal responsible. Taxes, we cant raise cut expenditures. But dammit, get us out of this debt frustrations about that came out in the 1795 report. Final hamilton document pertaining to fiscal responsibility is his defense of the funding system, which is incomplete. Perhaps he wrote it in 1795, six months after stepping down from the position of secretary of the treasury. It wasnt even published for another century. The incomplete document discusses the tubing features of hamilton system. First, the reasons for a soul in the state debts for assuming the state debts. Why he did it the way he did in page after page. Second, the reasons for funding the debt. This means specifically dedicating revenues before they could be used for anything else. You promise the bondholders these particular government revenues will first go to paying the interest on the debt. Funding had been attacked by hamiltons enemies and political one was the charge that funding, by making things better on better terms by making credit available on better terms. That. Ouraged credit shouldte not be good. Most of us think the opposite. That will encourage you to borrow more money. That will get you in trouble. Had no trouble undercutting such arguments. An analysis of this argument proves that it turns upon the abuses of a thing intrinsically good. Meaning, good, excellent public credit. That is important. I would argue over the last 50 years, we have been abusing public credit. , but ittrinsically good can be abused. The United States would enjoy excellent credit for the next two centuries, and would borrow money to a large the territory, enlarge the territory. Do this often by borrowing money to pay for money for the territory. The important point was to finance all the wars of the United States. Hamilton was right. Optimistic,been too that excellent credit might not be abused. We have been abusing our credit for the past halfcentury. The 63 times the debt has multiplied in the past halfcentury might be evidence of that. Hislton outlined reasons in january 1795 report. Congress appropriates more money to defend us from our enemies and pay us entitlements, such as Social Security and medicare, but if anyone suggest we ought to raise taxes to pay for these things, congress and the president pleases us by saying, we are already overtaxed. For a one of the past 50 years, in the history that i have seen, congress and president s congress and president s argue for cutting taxes even as they spend more. Time, they complained about the National Debt being too large. Debt bumps up against the Debt Ceiling Congress has enacted, they shut down the government, in what i would call a charade of fiscal responsibility, because the debt ceiling makes it impossible to pay for anything Everything Congress has offered. When are we going to bump into the charade again, this month . These arts serve to promote the accumulation of debt. The weight becomes intolerable. Eventually, he forecast revolutions and convulsions will take place. There can be no more sacred obligation on the public agents of a nation that should guard with provident foresight and inflexible perseverance against those mischievous results. To United States managed avoid these mischievous results for 175 years, but not quite in the way hamilton foresaw and recommended. Couple theo borrowing of state and local authorities with revenue measures to retire the principal eventually. Debt shows theal interest is paid, which is why we have such excellent credit in people sell things and by u. S. Government debt the history of never missing an interest payment. But we always pay the principal byo Economic GrowthEconomic Growth. Grows, whatever the government is taxing, it is going to generate more revenue. Through most of the history, we byage debt pretty well, growing the economy. To a larger economic base, so that we were able to pay down debts. What we did have until the middle of the 1960s was a certain amount of restraint. Int the debt would go up wartime, and the economy would grow, and that would reduce the burden. That is where we get to the notion of the debtgdp ratio. In 1790, the debt was 77 million. That was the debt hamilton restructured. It was 41 of the gdp. Rose to 84tually by 1795, when hamilton stepped down. But the gdp ratio fell to 22 , because of Economic Growth. 1811, jefferson and madison had cut expenditures, maybe a little too much. The1, in 1812, debtgdp ratio was 14 . In the middle of the 1830s, this ratio went to zero. You borrow a lot of money during , but then after the war, the economy grows, and the government takes its cut of a growing economy. Because of restraint and spending, which reduces debt income ratio. 1860, the debtratio was 1 . The civil war gave us 2. 8 billion of debt. By 1893, because of a growing , the civil wardebt gdp ratio was down. In 1914, the debtgdp ratio was only 3 . 1930, it is 18 . The depression raised it to 43 . 43 . 39, the ratio went to and 19 a lot of money was borrowed. 43 was like caltons 41 . 43 was like hamiltons 41 . 1946, 118 . The National Debt was larger than the gdp. Even though the United States gdp was half of the worlds gdp. We borrowed a lot of money in world war ii. 118 debtgdp ratio was down to 54 . ,he debt went up a little bit and the economy grew a lot. The 1950s were a good economic time. By 1965, it is down to 43 . 41 , i am writing my phd thesis during this time. Things start to go wrong, but it did not become apparent right away. The ratio went down in the 1970s, at 43 . It was down to 31 by 1981, even though the National Debt had tripled in that time. Those of you that are old enough to remember the 1970s, there were very high inflation rates. What we were doing was inflating ourselves out of debt, essentially. Tripled. Nal debt the inflation rate was very high. Gdp grew faster than the debt did. Inflating your way out of debt is not something hamilton would approve of. 1981, the debtgdp ratio is 31 . 46 in 1986. 54 in 1990. Time, Ronald Reagan wanted to increase the debt spending. He wanted to have tax cuts. His friends, a couple of pper, they say i will go along with your increase in defense spending, as long as you dont cut any of our programs. By 1990 had ratio gone up to 54 . We have the gulf war. It was up to 64 . 19932001, clinton was more responsible. He controlled spending and the economy grow. Fell from 64 in 1993 to 65 in 2001. 2005, it is up to 60 . 2008, it is up to 69 . 2009, it is up to 83 . In 2013, 1 hundred percent. 2016, one 04 . 2017, we dont know yet. 105 . Last 50 years, we have shown signs of fiscally responsibility. Fiscal irresponsibility. Hamilton had a consistent way of trying to keep us out of debt. Enact the didnt revenue measures to accommodate to prevent, against idle borrowing, we are running up debt faster. We count cant count on three growth to bail us out of our fiscal follies of the economy only grows at 2 . If the economy only grows at 2 . Interest rates are extremely low. Suppose that Interest Rates rise by mainly only 1 , when you have 20 trillion of debt. A 1 increase in interest, that is an extra 200 billion that has to be paid. That could be dangerous. Hope i have not spoiled your day. [laughter] we oughtt is something to think about. It is hamiltons 261st birthday. Ourselves about his analysis and warnings and maybe do something about it before it is too late. Gotten intotually the full dimensions of the problem we cap. Have. The problem we there are certain things, like unfunded liabilities, medicare, that are not part of the traditional debt. That could be an even bigger problem. We have gotten ourselves into a y irresponsible situation. As we often do, we look back to those great men who give us guidance, to get her act that together a little more to get our act back together a little more. Thank you for your attention. I am willing to answer some questions. [applause] here. A is wait for your microphone. The last few hundred these are imply different times, different cultural expectations. There are times when society elects people who do not want to raise debt or taxes, and there are times i allow like now, when congress does not seem to fear debt as much as in the past. Full was less feel fearful of debt than his friends. Can you speak about the various times in the last 200 years when the temperament of the community, the country, affected the debt . Sylla hamilton thought the he more than one said the National Debt, provided it is not excessive and wellmanaged, can be a national budget. That was an odd idea for the 18th century. Adams and others did not like debt at all. Jefferson was much more attuned to the prevailing view. Hamilton knew that is just the other side of credit. Is a good thing. Hamilton saw credit as a new power in the world. He said, if you dont have good credit in the United States, the arevulnerable we vulnerable. Credit is like a weapon in a war. Hamilton had different ideas than most people. Everyone thought it was terrible. , but creditblessing and debt are the same thing, two sides of the calling. F the coin. Yes, we will run up the debt in what we do that, were going to be fiscally responsible and let the economy grow. I think that was basically the way we ran the country until the 1960s. We incurred debts in wartime and debtgdp ratior was in 1946, 1 18 118 in world war ii. Something changed in the 1960s. We began to not care that much. By Government Finance itself ing that. It didnt make any difference whether you raise taxes or borrowed money. Whenever the government borrowed a lot of money to finance itself, we knew we would save because we knew taxes would go up. It is an interesting economic concept, but i dont did it works in practice. Life,rst 25 years of my we seemed to be doing the same things we did in the first two centuries. In the last century of my life, we seem to be doing something else. What is behind the change is what youre getting at. Maybe it is something we should think about. Thanks for coming. Out cuss the crowding can you discuss the crowding out what influences that have on the private sector . And at what point does the government borrow too much . 130 of gdp has a very powerful impact. Sylla the runup of the debt during and after the financial crisis, when the andployment rate was rising we were having close to 10 unemployment and the economy was in the Great Recession, you dont have to worry about crowding out in those instances. Economists of us economists now say the Great Recession lasted longer than it should have and growth has been slower, because the Obama Administration did not have a bigger influence. It probably should have been bigger. The economists were only in office for a few months and they didnt realize how about the recession was. You dont have to worry about crowding out when the economy has a lot of unemployment and procession. Fast forward to now. We have pretty much full employment and the economy is growing at 3 . This is not the time when you want to have a tax cut finance by higher debt. In this situation, at full employment, if the government over the next decade or so runs up the debt 1. 5 trillion more than it would have, that money is not going to be available in markets for private investment. Crowding out is a problem, but it is not a problem all the time, only when the government is competing with private enterprise for capital. When does it get too big . That is interesting. The peak in United States was 180 in 1946. In 1946. In 1815, the british were , and theyhe french. Nded up fighting napoleon the british borrowed a lot of money. The only one party lost was the american revolution. Britain lost was the american revolution. End ofcredit at the the napoleonic wars, the british had a gdp ratio of 250 . If you were really worried about , you would say, it is in terrible trouble. But the british but a little on spending. The british economy grill. The debtgdp ratio threat the throughout the 19th century, restraining their spending, they grew out of there are 250 . 250 . W out of their some people would say the best days of the u. K. Were in the 19 century, when they had this 19th century, when they had this humongous ratio. Somehow, we could bring about spending restraints, and hope that our economy would grow 2 that manyhe economists forecasted. Then we dont have such a problem. Point,ing back to your and typically have a Public Awareness now, there is nobody i dont think we have a Public Awareness now, there is no one pushing for doing Something Like this, to allow debtfinanced spending to go on. These will be like tax cuts. That is what hamilton warned us about. To the gentlemans question , rossthe culture, in 1992 one of the most successful thirdparty candidacies. His two main platform items were trading and the debt trade and the debt. Giant sucking sounds and big charts. The interesting thing about him was he drew the countrys attention to the issue of the debt. Do you see any of that type of leadership anywhere . Sylla this crowd is not the average american crowd. Most people what hamilton said, that we should responsibly manage debt, most people would agree. What we seem to be lacking is the leadership at the top levels. There is something called the concord orrelation, coalition. When they started worrying about the rising debt in the financial crisis, krugman made fun of them. E was sort of right in the middle of a financial crisis, it is not right to worry about debt. But he said, you never have to worry. Perot did not get elected. Clinton sort of agree with newt sort of agreed with newt gingrich. I dont see that working right now. We are talking about a lot more spending for infrastructure, building walls. You need a mic. Remarks byted your decrying the tax plan. , and here alive today knew about it, what hamilton agree with you that cutting taxes and restoring private property to the American People at a time when gdp is , which hely near zero agree with you that cutting taxes is not fiscally responsible . Sylla i said hamilton would not think it was fiscally responsible. I think you are wrong with the curve. Hamilton did have an idea about it. Some people said hamilton was a protectionist. He was not. He said, i dont want those tariffs to go too high. If you keep out the imports, you wont collect any revenue. If you put imports so high, the government has no imports and there would not be a revenue. He was aware of this curve idea. Talk,just assumed in my that hamilton would agree that of fiscally rs fiscal policymaking is not very responsible. I might have an answer to the gentlemans question. Instant gratification, lack of responsibility. I was one of the original 50s and i am partially to blame. And i am partially to blame. Delayedgs, lack of gratification. Change thatltural is endemic into our society. Wefamous cartoon says, have looked at the problem and it is us. That is pogo. Sylla we have no time to worry about the National Debt or the debt income ratio, because we are checking it all the time. I want to travel back in time to the beginning, 1790. Can you talk briefly as to what hamiltons rationale was for assuming the debts of individual states . Sylla you should buy this book coming out. [laughter] will do projefferson and madison historians distort this tosaying hamilton wanted assume the state and National Debts so the National Debt would be bigger and more people would give their Interest Payments to the federal government and it would generate support for the government. Hamilton said, that idea occurred to me, but it would not have been my main reason. If you have the federal government and the State Governments all within taxing authority, hamilton thought there could be collision collision between federal taxes and state taxes. This could threaten the country. We did get the federal government the power to tax us directly give the federal government power to tax us directly. The solution to the state and federal governments taxing us was to take the state gets into the National Debt. The country held together pretty well for the next few decades because State Government didnt have to borrow much money. Wasfederal government raising revenue and states werent mad at it. The governments finance themselves with imports. Financed themselves with imports. That was the argument. It is 20 or 30 pages of justification. It was in this document that was never finished. I read it carefully. If you are not persuaded it is good policy, you must be a victim of jefferson. [laughter] [indiscernible] it was. I am puzzled by your response that hamilton would have found tax cuts to be fiscally responsible, given the fact there is another part of the equation, that if you cut back government expenditures, that would correlate with decreasing taxes. Hamilton was an ardent defender and heate property, thought that there should be liberal government, that perhaps what government was making expenditures on was outside the purview of a properly limited government. Are expenditures hamilton would advocate cutting . Sylla you were surprised that i said hamilton wouldve thought tax cuts were fiscally responsible . When you are running up expenditures as we are, and that doesnt seem to be fiscally responsible. But your other part of your question is more about whether hamilton wouldve ever wanted to cut taxes . Oh. [indiscernible] dr. Sylla what would hamilton think about expenditures . Some people say he wanted big government. That is not right. Hamilton wanted a limited, but energetic government. I think he wasnt against government expenditures. He thought we ought to have a National Infrastructure program. Jefferson secretary of the treasury thought the same thing. Jeffersons secretary of the treasury thought the same thing. I would say hamilton was against frivolous expenditures. The federaluld say government has no business doing that. We are not still financing innercity, nighttime basketball. The federal government would pay to keep the lights on, so the kids would play basketball, doing less wholesome things. Hamilton probably wouldnt have thought that was the federal response ability. Courseernment was of much smaller. The federal government spent more money in every year of u. S. History than all the states together did. For long time, it was around 3 of the gdp, and now we are likely talking 20 . The government was much more limited through most of our history. I dont know what hamilton would have thought. That is something he just wouldnt have anticipated, a National Healthcare program. You spoke about 2 Economic Growth. But there was a targeted deflation rate of 2 . Doesnt that cancel out in the last two decades . Does the inflation rate we are experiencing now cancel up the Economic Growth cancel out the Economic Growth . Sylla they want to raise Interest Rates too fast because the inflation has been slightly less than 2 . There is nominal gdp growth, less than real growth, but i dont like the 2 inflation target. There were a lot of periods in the United Statess history, when you had even a little bit of mild deflation and the world did not come to an end. Each of 10 inflation target is based on the experience of the 1930s, when there was really bad deflation. The argument i have heard economist make economists make, if you target 2 inflation, you will be farther away from experiencing deflation. They say its the worst thing in the world, and i dont. Idea, the economy that will or 4 , and lead to a higher interest rate. Make. S an argument they volker, 70 fed ought to target 0 inflation. That is not a bad thing. Even thoughfool us, it has the value of our money in half in about 35 years or so. Was that the last question . [applause] thank you. [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] one of the things the Alexander Hamilton awareness withty indicates is those a great scholarly way. We have a special award we would like to give to you. For your commitment to representing Alexander Hamiltons record to national and international organizations, to university students, and to the public. That is the purpose of this museum. And as a mentor, you have been very patient and kind with many people. We wanted to thank you. I want to read the award. Sylla is hereby recognized as a national provide scholar to accurate, objective, and insightful information to the public about the United States of america possible markable founding father, alexander states of united americas remarkable founding father, Alexander Hamilton. Announcer you are watching American History television, i weakened every weekend on cspan3. Like us on facebook at cspan history. We talk aboutt, the 1968 north korean capture of the uss label. Mr. Lerner is the