Hamilton's Blessing

In a colorful, sweeping narrative, American Heritage business columnist Gordon charts the history of our national debt, a mere $80 million in 1792, but now a staggering $5.1 trillion. Alexander Hamilton, first secretary of the treasury, conceived of a manageable federal debt as a strategic instrument of national policy, and indeed, deficit spending helped the North win the Civil War. President Andrew Jackson eliminated the national debt in 1834, but by shifting federal funds to state-chartered banks he fueled an upsurge in speculation and inflation, sparking the country's first major depression in 1837. Gordon deftly profiles a gallery of financial figures, including aluminum magnate Andrew Mellon (Harding's treasury secretary and the father of ""trickle-down economics"") and tough, tubercular Federal Reserve boss Benjamin Strong, whose ill-timed death triggered the 1929 crash. Gordon advocates a flat income tax, abolition of political action committees' financing of campaigns, and the creation of an independent accounting board to monitor federal spending. In exposing the underbelly of American political and economic history-our debt-ridden financial system-he has produced an enlightening primer for the layperson. History Book Club selection. (Feb.)