back to 1835!

Doug Henwood dhenwood at
Wed Aug 4 09:41:18 PDT 1999

Tom Lehman wrote:

>The devil in this whole deal is going to be in the details---the mechanics of
>how it is going to done.
>Comparing 1835 to today would be a pretty tough nut to crack! Not too many
>people really have a handle on the economic power struggles of the 1830's---I
>sure as hell don't and I don't think in all honesty even the experts do. The
>whole power struggle between Andrew Jackson and the Bank of the United States
>known as the "BUS" and other issues of the time like tariff nullification,
>removal of the American Indians and as Doug has pointed out the "internal
>improvements" mania all made for a very fluid and hard to understand in
>retrospect politics with political sides being changed all of the time by the

That debt reduction was only one of six major episodes of debt reduction. The panics of 1819, 1857, 1873, and 1893 were all preceded by periods of debt reduction, as was the 1929 crash. Of course, it may not be a matter of cause & effect: the surpluses the funded the debt reduction could have been reflections of the fat phase of the business cycle - I just don't enough of the history of the 19th century to tell. But it's hard to find a precedent for nominal debt reductions coming before a boom.


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