Would Alexander Hamilton want the world today?

Let Alexander Hamilton rest in peace!

The talk of the EU's alleged “Hamilton moment” is forgotten about history and sabotages a pragmatic approach to the corona recession.

These days, European politicians are digging deep into their historical parables. A new “Marshall Plan” for either Africa, the global climate, the Western Balkans or the corona-damaged economy was just called for, so you have landed at the end of the 18th century and at the cradle of the United States of America: a “Hamilton -Moment “is currently experiencing the EU, commented, exemplary for many, the German Finance Minister Olaf Scholz the intention to transfer additional transfers of 500 billion euros from the Union budget to ailing regions and industries for three years, and to cover this with bonds, which the European Commission should issue. What is meant is: the EU is now finally making the leap to a real economic and monetary union, with joint debt management.

As a reminder, when Alexander Hamilton became Treasury Secretary in 1789, the young US was practically bankrupt. When he left office six years later, he had restructured the state finances by taking over the debts of the 13 former British colonies from the War of Independence to the federal level and turning them into solid debt management via government bonds. In doing so, he laid the foundation for the world power of the USA, its treasury bills, and the dollar.

Anyone who knows America's history can only shake their head at the Hamilton comparison for several reasons. The first: the United States gambled away its creditworthiness at the time - but that is not the case for any EU country today. You can all refinance easily. Second: Hamilton amalgamated 13 individual debts that had a common cause: the expensive war against the king in London. The existing mountains of debt in the EU states, however, have purely national and, as such, diverging reasons. Third, US government spending at the time was minimal. Keyword: night watchman state. In 1790, the US federal government spent a whopping 0.4 percent of economic output. In the EU of the 21st century, on the other hand, the average government quota is more than a hundred times. We live in redistributive states with well-developed social systems and expect diverse public services. That costs something. And fourth: Hamilton created a system in which the no-bail-out rule is strictly adhered to. To date, the US government has not punched out a single bankrupt state. As is well known, the EU overturned this dogma in order to keep Greece in the euro.

For all of these reasons, it is unwise to speak of a “Hamilton moment” for Europe today. Only tiny minorities want the United States of Europe - and hardly anyone would, unlike 240 years ago on the other side of the Atlantic, go to war for them (against whom?). Above all, such Euro-federal fanatics strengthen the resistance to the plan presented on Wednesday to fight the Corona recession soberly and pragmatically. Commission President Ursula von der Leyen emphasized on Wednesday that she did not want to establish a joint tax sovereignty for the EU. "As I see it, Europe is at a Hamilton moment, but there is no Hamilton in sight," said former US Federal Reserve Chairman Paul Volcker in 2012 when he visited the continent during the euro crisis. That is still true eight years later.