Les états-unis naguère, l'europe aujourd'hui

Translated title of the contribution: United States then, Europe now

Thomas J. Sargent, Jacques Le Cacheux

    Research output: Contribution to journalArticlepeer-review


    Under the Articles of the Confederation, the central government of the United States had limited power to tax. Therefore, large debts accumulated during the US War for Independence traded at deep discounts. That situation framed a US fiscal crisis in the 1780s. A political revolution -for that was what scuttling the Articles of Confederation in favor of the Constitution of the United States of America was-solved the fiscal crisis by transferring authority to levy tariffs from the states to the federal government. The Constitution and acts of the First Congress of the United States in August 1790 gave Congress authority to raise enough revenue to service a big government debt. In 1790, the Congress carried out a comprehensive bailout of state governments' debts, part of a grand bargain that made creditors of the states become advocates of ample federal taxes. That bailout created expectations about future federal bailouts that a costly episode in the early 1840s proved to be unwarranted.

    Translated title of the contributionUnited States then, Europe now
    Original languageFrench
    Pages (from-to)5-56
    Number of pages52
    JournalRevue de l'OFCE
    Issue number7
    StatePublished - Dec 1 2012


    • American economic history
    • Public debt

    ASJC Scopus subject areas

    • General Economics, Econometrics and Finance


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