During the Revolutionary War, the weakness of the political bands that united the thirteen newly constituted states was apparent only to a very small minority of the American populace. Soldiers and military leaders in particular were acutely aware of the government’s limitations. Living federal policy, the soldiers were oftentimes without adequate clothing or shoes, even during the dreadful winter of 1778-9, and rations were always skimpy. With choices sometimes between eating boiled tree bark or nothing at all, some soldiers reverted to pillaging local farms and stealing from citizens in nearby towns, further alienating a divided populace from the cause of the Revolution.
The currency issued by the Continental Congress, known as Continentals, was practically worthless by 1778. The lack of cooperation between the Congress and the states, among other things, led to a quick currency devaluation, of which Congress had little power to stem. The power of taxation was assumed by the individual states, which placed sectional interests above national considerations, and in effect deprived the Army of desperate funding. Alexander Hamilton, lamenting in Federalist 15, explains that “we owe debts to foreigners and to our own citizens… without any proper or satisfactory provision for their discharge… Public credit [is] an indispensable resource…,” the cause of which “we seem to have abandoned.” Ultimately, the source of the Army’s problems, as well as those of the nation’s after the fighting subsided, traced to the very structure of the Articles of Confederation.
(Shay’s Rebellion. Source: Google Images)
The weakness of the Articles of Confederation truly came to a head for the American public in the aftermath of what came to be known as Shays’ Rebellion. To service the heavy debt burden it accrued after the war, the state of Massachusetts raised land taxes, which disproportionately hurt small landholding farmers. Unable to pay his debts and taxes, war veteran Daniel Shays took up arms with hundreds of fellow farmers after unsuccessfully appealing to the state legislature.
Despite living and breathing the defects of the Articles of Confederation as Commander-in-Chief of the Continental Army, George Washington, now settled into retirement after his remarkable resignation, was appalled at the breakdown of law and order in Massachusetts. A well-ordered man who understood the grave importance of stability in society, especially a fledgling one, Washington was nothing but distraught over the ensuing anarchy of the Rebellion. Ron Chernow, in his magisterial biography Washington: a Life, concluded that “Shay’s Rebellion crystallized for him the need to overhaul the Articles of Confederation.” Writing to James Madison, Washington asked “What stronger evidence can be given of the want of energy in our governments than these disorders?”
Indeed, the problems that originated from the Articles of Confederation, truly noticeable only to those who were directly impacted during the melee of the war, were now at the forefront of the public eye. Shay’s Rebellion was a tangible manifestation of the Articles’ defects. The long-term effect of the rebellion, in Madison’s mind, was that it “contributed more to that uneasiness which produced the constitution and prepared the public mind for a general reform” than all the problems associated with the Articles combined [emphasis added].
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Even though government spending, on entitlements in particular, has been ballooning over the past few decades, the true weight of such costs was only appreciated by a small minority. The continuous growth of the American economy from the 1980s through the early 2000s produced a sweeping sense of contentment among Americans that were only too happy to ignore the reality of mounting financial burdens.
That feeling, however, began to change as Wall Street was shook to the core at the collapse of several giant firms in September 2008. The $700 billion Troubled Asset Relief Program (or bank bailout) was quickly passed to stabilize the financial industry. Several other expensive measures were taken to add additional stability to the economy, such as $275 billion Homeowners Affordability and Stability Act, which was aimed at preventing home foreclosures and helping Fannie Mae and Freddie Mac purchase and refinance mortgages. Such measures increasingly and irreversibly mounted feelings of concern and anxiety throughout the American populace.
It was not until the passage of the $787 billion American Recovery and Reinvestment Act of 2009 (i.e., the Stimulus Bill) that the true magnitude of the government’s debt was fully fathomed by the public-at-large. The Stimulus Bill garnered much support in its conception: 43% of those polled on believed the stimulus was a good idea, whereas 27% believed it was a bad idea, according to a NBC New/Wall Street Journal poll on 1/14/2009. Once it was passed, along divided party lines nonetheless, the Stimulus Bill was a sudden and shocking glimpse into the reality of our nation’s finances. Despite much initial support, the Bill became more distasteful to Americans as time went on. According to a January 2010 CNN poll, weeks after it was signed into law it was supported by 54% of the public; whereas just under a year later (when the poll was taken) 56% disapproved of it. A June 2009 Wall Street Journal poll showed that in January 2009, 43% of Americans thought the stimulus was a good idea and only 27% thought it was a bad idea. However, in June 2009 37% thought it was a good idea and 39% thought it was a bad idea. The change in public opinion, noticeable yet not completely reversed, was, however, accompanied by a powerful new movement that took center stage in setting the tone and direction of the nation’s debate on government spending in the wake of the Stimulus Bill.
Although it was initially created to protest dietary taxes proposed in New York State, the Tea Party movement became completely galvanized and unified around opposition to the Stimulus Bill. With large grassroots events in most major cities, the Tea Party gained a national presence on all major television networks and began supporting political candidates who held a political philosophy that was focused on reducing the debt and decreasing government spending. On the whole, the Tea Party candidates in 2009 and 2010 came away with major victories across the country, especially given the Democratic sweep in 2008. Today the national debate is almost completely focused on the economy, and particularly on the role of the federal government in the economy and how much money it should be spending.
Although the economy is a perennial debate topic, the rigor and focus it commands in the 2012 Election may never have happened if there wasn’t such tremendous opposition in the aftermath of the Stimulus Bill.
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Like Shays’ Rebellion, the Stimulus Bill had the unintended consequence of preparing the public mind for a general reform. The rebellion illuminated the structural defects of the Articles of Confederation; whereas the Stimulus Bill has illuminated a fundamental disagreement over the role of the federal government, especially in the economy. The flaws of the Articles were only evident to a minority of people who were living and breathing its defects. It took a rebellion, with all its chaos and instability, for Americans to realize the folly of disunity and thus formally begin the process to rectify the Articles’ flaws in the form of a new constitution. So too the fundamental disagreements over the role of the federal government in the economy have hitherto been understood and discussed only by a small minority of people. But now, because of the sticker shock of the Stimulus Bill, these discussions have assumed a commanding role in national, state, and local politics. While the verdict is still out on what school of thought will ultimately prevail, the debate, nonetheless, is happening and the mind of the American public is being engaged in the question of general reform.
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