Answer:
Alexander Hamilton, the first Secretary of the Treasury of the United States, believed that a national debt could strengthen the United States and help ensure its survival for several reasons:
1. **Establishing Creditworthiness**: Hamilton believed that assuming and paying off the debts incurred by the states during the Revolutionary War would help establish the creditworthiness of the new federal government. This would make it easier for the government to borrow money in the future, both domestically and internationally.
2. **Creating a Unified Nation**: Hamilton saw the national debt as a way to bind the states together. By assuming state debts at the federal level, he aimed to create a sense of national unity and shared responsibility for the financial stability of the new nation.
3. **Attracting Investment and Capital**: Hamilton believed that a well-managed national debt would attract investment and capital to the United States. It would provide opportunities for individuals and institutions to invest in government bonds, thereby helping to stimulate economic growth and development.
4. **Encouraging a Financial Class**: Hamilton wanted to foster the growth of a financial and commercial class in the United States. He believed that by creating a market for government securities, it would encourage the development of financial institutions and markets, which in turn would support economic expansion.
5. **Promoting Economic Development**: Hamilton recognized that the government could use borrowed funds for productive purposes, such as infrastructure projects and investments in industry. This could help stimulate economic development and modernize the young nation.
6. **Maintaining Foreign Relations**: Hamilton believed that a well-funded federal government would enhance the United States' standing on the international stage. It would demonstrate the government's ability to meet its obligations, thereby strengthening its negotiating position in foreign affairs.
7. **Providing a Stable Currency**: By assuming state debts and establishing a system for managing federal finances, Hamilton aimed to create a stable and reliable currency. This would help facilitate trade and economic transactions both domestically and internationally.
Overall, Hamilton's approach to national debt was grounded in his belief that responsible fiscal policies and a well-managed financial system were essential for the long-term stability and success of the United States as a fledgling nation. His economic vision played a significant role in shaping the financial foundations of the United States.
Step-by-step explanation: