Finances of the Federal Government in the Early Years of America

During the early years, the federal government was blamed for the economic recession. The laws for the budget and the managing of the money where made by the House of Representatives and the Senate. During 1800 to 1823, there was a recession that lasted seven years and the federal government was blamed. When the Federalists took control of the house, there were no deficits for two years.

The different laws have changed in regards to who controls the money for the nation. The Great Depression in the 1930s was one of the worst depressions in history. The nation blamed the unfettered capitalism for not taking care of the finances. President Roosevelt and Congress created a law that the government can get involved in the nation’s finances.

During the depression, the Federal Reserve System allowed the banks to control the money. The banks raised the currency supply sixfold, refused to lend money and demanded payments from customers with existing loans. They also raised there interest rates so during this time no one was able to buy homes or they were losing their homes. The founding fathers of our nation were right in creating the law that Congress should have control of the nation’s money. However, in 1913, the law was changed and the bankers began controlling the money. America is the richest nation, but sadly it is also the nation with the highest debt. It may just be time to resort to the ways of the past.