Question

How is the national government supposed to obtain money under the Articles of Confederation? A) By levying taxes on the states. B) By borrowing money from foreign countries. C) By printing its own currency. D) By imposing tariffs on imports.

Answer 1

Under the Articles of Confederation, the national government was supposed to obtain funds by requesting them from the states. However, states often failed to contribute, leading to an underfunded national government. The government also lacked the power to directly levy taxes or impose tariffs, leading to financial instability until the Constitution was adopted.

Step-by-step explanation:

Under the Articles of Confederation, the national government was supposed to obtain money primarily by requesting funds from the states, which were required to contribute in proportion to the value of the land within their borders. This method, however, proved to be largely unsuccessful as states often failed to fulfill their duty, resulting in a financially underfunded national government. Furthermore, the national government lacked the power to levy taxes on citizens directly, a power held only by state governments. The Congress also lacked the power to impose tariffs to raise funds.

Attempts to amend this system required the consent of all states, a solution advocated by a group of nationalists that included key figures like Alexander Hamilton and James Madison. Their concerns revolved around the financial health of the republic and the national government's inability to pay off the debts accrued during the American Revolution. However, despite their efforts, the limitations of the Articles of Confederation persisted until being replaced by the Constitution in 1789 which granted federal government powers, such as taxation and control of foreign policy.

During the era of the Articles of Confederation, the national government also had the power to coin money, but that power did not exclude the states from doing so. Therefore, many states issued their own banknotes, further complicating the country's economic stability. In the end, the lack of a unified, empowering system for the national government led to financial instability and eventually, a call for a new system of government – the U.S. Constitution.

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