The U.S. Treasury
The U.S. Treasury, founded on September 2, 1789, after President George Washington approved the proposal of the Congress. The U.S. Treasury is an executive branch of the U.S. government, whose functions include the development and execution of economic and monetary policy of the U.S. It is in charge of issuing all treasury bonds and promissory notes.
It carries out a lot of duties through the following branches: the Internal Revenue Service (IRS), the U.S. Mint, the Bureau of the Fiscal Service, and the Alcohol and Tobacco Tax and Trade Bureau.
The U.S. Treasury plays a great role as the responsibilities of the department include supervising financial organizations, controlling exports and imports, issuing banknotes, minting coins, generating public revenues by collecting taxes, and implementing tax policies and programs.
The U.S. Treasury explained
The U.S. Treasury is the special financial department that promotes economic prosperity and financial security of the country.
On March 4, 1789, the U.S. Constitution came into force. On this day, the federal authorities established in accordance with the Constitution began operating, including the First Congress. The first meeting of the Congress resulted in a series of events that brought the establishment of the US Treasury closer.
The President of the U.S. announces the nominee for the secretary of the Treasury and the U.S. Senate. then confirms the candidate.
Prerequisites for establishment of the U.S. Treasury
In February 1788, a compromise between the states was reached: Massachusetts and other states agreed to ratify the U.S. Constitution that was drafted in 1878. After the Constitution was approved, a new more powerful federal government was formed on March 4, 1789.
The first Secretary of the Treasury, Alexander Hamilton, was nominated on September 11, 1789. The result of his work was an economic program that Hamilton developed in 1790-1791 and presented to Congress. The program addressed such topical issues as the state loan, the payment of war bonds, the foundation of the unified national bank and the implementation of the system for the collection of federal taxes.
Internal Revenue Service
The Revenue Act, signed into law by Abraham Lincoln in 1861, introduced the federal income tax at a fixed rate to overcome budget deficit. After that the position of commissioner of internal revenue was created. Later they stopped charging the tax. However, it was reintroduced in 1913, when the Sixteenth Amendment to the U.S. Constitution was introduced by the Congress on February 3, 1913. It gives the power to the Internal Revenue Service to levy and collect a federal income tax. All the proceeds went to the federal budget.
Treasury bills and bonds
Shorter-term notes, bonds, and treasury bills are issued by the government of the country to be used as a monetary obligation. A bond's term can range from 1 day to 30 years. Treasury bonds are risk-free, meaning that there is no risk that the citizen will lose his principal if he invests in bonds. A person can be reasonably sure that the U.S. government will not refuse to fulfill its obligations to holders of bonds. That’s why they are extremely popular among investors.
The Fed is in charge of buying and selling the bills and bonds to manage the money supply and battle inflation.
Head of the U.S. Treasury
The U.S. Treasury is headed by the Secretary of the Treasury, whose duties include advising the President on economic issues and policy and conducting foreign and domestic financial policy. The Secretary of the U.S. Treasury develops recommendations on public debt management and tax policy and represents the interests of the government at meetings of international organizations.
The current secretary of the U.S. Treasury is Janet Yellen. On November 30, 2020, she was nominated by Joseph Biden for the Secretary of the U.S. Treasury in his administration. Earlier, in 2013, the 44th President of the U.S. Barack Obama nominated Yellen for the chair of the Fed. On February 3, 2014, she took up duty as the chair of the Fed and became the first woman to head this department.