Flying solo again in Federalist No. 21, Alexander Hamilton turns his attention to the particulars of America’s predicament under the Articles of Confederation, a failed system that presents “the extraordinary spectacle of a government, destitute even of the shadow of constitutional power to enforce the execution of its own laws.” That word—execution—is an especial favorite of this prophet of presidential power.
One of the most glaring defects of the Confederation is its reliance on the states each to fill a “quota” of the Union’s revenue needs. Predictably, the states fail to meet their obligations, and the federal treasury is empty as a result. “There is no method of steering clear of this inconvenience but by authorising the national government to raise its own revenues in its own way.”
But there are ways, and then there are ways. Hamilton, already thinking like the treasury secretary he would become, reveals his grasp of basic economics as he had done earlier in No. 12:
“It is a signal advantage of taxes on articles of consumption, that they contain in their own nature a security against excess. They prescribe their own limit; which cannot be exceeded without defeating the end proposed—that is an extension of the revenue. When applied to this object, the saying is as just as it is witty, that ‘in political arithmetic, two and two do not always make four.’”
Okay, so it’s not exactly a knee-slapper. But just it certainly is.
(For explanation of this recurring feature, see here.)