Tuesday, July 13, 2010

What were two economic problems created by the Articles of Confederation?

Two significant economic problems caused by the Articles of Confederation were as follows. First, the national government set up by the Articles lacked the authority to levy taxes. Essentially, it could only request funds from the states, who could not be coerced. This meant that the government struggled to fund the rising debt from the Revolutionary War, a situation that made it difficult to secure credit from European nations. This was perhaps the most urgent economic problem resulting from the weakness of the Articles. A second problem was that the national government lacked the power to regulate interstate commerce. This meant that states could, and often did, impose trade restrictions in the form of tariffs and duties on each other's produce. Moreover, some states refused to allow goods from others to be exported from their ports. The need to resolve these economic difficulties (which accompanied concerns over many state laws that provided relief for debtors at the expense of creditors) was a major factor contributing to calls to revise the Articles of Confederation. 

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