USA HISTORY

Detailed explanation-1: -The assumption of state debt would increase the size of the national credit market Hamilton hoped to create. The market would also help establish America’s international credit rating and hinder individual states from becoming too powerful in the new nation.

Detailed explanation-2: -Hamilton sought to create a stable financial foundation for the nation and increase the power of the central government. He pushed for the national government to assume state debts, which would bind creditors to the federal government.

Detailed explanation-3: -He warned against high levels of public debt and given the inevitability of future government borrowing he advised that new debt should be incurred only if the means of extinguishing it were also created. With respect to the current debt he proposed a plan that would extinguish it in thirty years.