How does government control of national debt differ from socialism, which is control of national wealth?

Question

The rift that led to the Civil War can trace its roots to the difference of opinion between Thomas Jefferson and Alexander Hamilton.
Hamilton, a Federalist, believed the new USA should assume all the war debts incurred by the states as a result of the war with England. He believed this would make the creditors loyal to the new country and invested in its success.
Jefferson felt this gave too much power to the government. With bankers and the rich loyal to the federal government rather than the states, the federal government could use that power for coercion.
This is pretty much the same argument that revolves around capitalism vs socialism. If a government controls wealth, it also controls the people. How does control of debt differ?

Answer 1

You make a good point that government funding usually leads to government control. However, the difference with the example you cite it was the government who owed money, and not the government distributing money. Obviously, they were handing out money to pay back the debts which had already been incurred, but that is quite different from socialism where the government has all the wealth to start with and then decides who gets what. Hamilton's point was that the creditors would not want the new nation to fail because if the nation failed, they would lose their money. If anything, the creditors, not the national government would have had the power.

Answer 2

The only dictionary definition difference between socialism and capitalism is in the forced redistribution of wealth.

We live in a Democratic Republic, not a true democracy. In a true democracy ever citizen votes on every issue. It would be anarchy. We would never get anything done. We elect people to represent our best interest. Watch is often a failing proposition.

Socialism, is not always a bad thing. You can point to Medicare, SS and host of other beneficial programs.

That said, there are those in out government that would take it to far. Socialized medicine is a great example. I just watch Michael Moore's Sicko. He extols the virtue of socialized medicine. While glossing over all it's failings.

While Medicare is a great program, it is wrought with corruption and waste. The government, in many cases now, pays private insurers to administrate their plan and costs have gone down. The fair market works.

I had an economics class in college and the professor was describing govt regulated monopolies. He explained there is no competition, but the govt caps the prices.

I, a naive Freshman, raise my hand and ask why this would be a bad thing? If there is a cap no one gets hurt. He then replied "Have you ever been to the tag office." If a group doesn't have any competition then it does not have to responsible to its customers. Govt works on this principle.

Hillary Clinton has made some scary comments about the redistribution of wealth. Thank God, those in here own party would not let her do everything she wants. She would install Lenin and Stalin's workers paradise if she could. She is a limousine liberal to the extreme.

Answer 3

because the government only has two ways for revenue, treasury bonds or taxes. The government is responsible for creating a growth friendly environment to allow the business and consequently the people to prosper. if you dont allow the government to accrue debt you are squelching the business from expansion creating a third world type atmosphere. Everytime you need a little more money you cant keep going to the trough of the people and business that make this country grow.

The problem arose after the new deal when the federal government with the massive amounts of money flowing through it got involved in state spending. corruption was under control and limited by the smaller amounts of capital a state had its hands on.

today the Teapot dome scandal wouldn't raise a blip on the radar because it is the norm.

The founding fathers would be horrified on what we have done to their federalist views and allowed the worst of both worlds to infiltrate this country

Answer 4

You pose a good question but we are in a bind because our government has given its control of the Monetary System away and can only go in debt to finance its services -and borrow the money and pay interest to do so.Congress goes along with this because they can get money anytime they need to finance some pet projects in order to get re-elected. Socialism? Capitalism?---we sure have plenty of inflation and taxes

Answer 5

Socialism is government control of the purse strings. Capitalism is free market. Controling debt is huge in the discussion of freedoms. I want to be able to send my money to China if it will end up making me better off. When you let the government control your money they will spend two dollars for every one that you give them, thus an increase in taxes is iminent. The less money the government controls the better off the people are.

Answer 6

Big difference.
In a nut shell, Congress has the purse strings and if people take the time to vote once in a while for fiscally conservative representatives (from either party) perhaps the deficit wouldn't even be an issue.
Remember, "In a democracy, the people always get the government they deserve."

Answer 7

Add corruption to the mix, today we have federal control and with it controlled by a smaller group we have greater corruption it is easier to corrupt a small group than a large one, in the last 10 years say how many heads of SEC have gone to work for big investment firms or equity firms ? just heads not to mention others. how can they properly regulate while wheedling for the big buck job in the industry they regulate this is common practice but how does this effect our economic structures? How well can they effectively look out for the common good while regulating while ingratiating themselves with industry. these are tough questions that we will not solve on this site but need to be addressed. before we have greater meltdowns in our economy, malfeasance used to be a crime rather than common business practice.