Introduction
The treasury department was officially established in 1789 in the US. However the functions of the department were still being carried out in the earlier period. Its history can be traced back to the American Revolution. During this period it was very necessary to finance the independence war against the Great Britain. The congress was not in a position to control taxes and there was no specific method that was used to control the finance that came from the foreign investors. In 1781, Robert Morris was appointed to be in charge of finances. In 1789, the United States held its first congress in New York (US T.W). This congress saw the formation of government under the constitution. In the same year the government came up with a formal body that was going to be in charge of all the finances within the government. The body was to be headed by a secretary of the treasury. Alexander Hamilton took charge of the office as the first secretary to the newly formed treasury department. He served the office from 1789 to 1795 (Katz, p14). In the 1800 the building that housed treasury was moved to Washington D.C in porticoes Georgian Hadfield. However the building was later burned by the British in 1814 but it was later replaced by another building built by James Hoban. The treasury building that exists to date was constructed between the year 1836 and 1869. Since its enactment, the department was involved with various duties and services towards the American community.
Main body
For the first two centuries the treasury was basically involved in the fiscal and revenue collection duties. The functions of the treasury were defined in the Treasury act of 1789. Activities such as the general land office, business operations among others were part of the treasury until they were moved to other new departments with the sole mandate of handling their independent activities. Throughout the years, the treasury has been under the powers of the constitution and various changes and developments have been adopted. For example the Civil war led to the loss of revenue from the customs and this necessitated the formation of the Bureau of Internal Revenue and also the printing of the paper currency. The treasury also saw the formation of the National Banking system. With the unfolding of the events in the World War II, the role of the treasury became more advanced in economic development and this gave way to more bodies within the treasury such as the International Monetary Fund and the World Bank (US T.W).
The treasury has been organized into two components. This includes the departmental offices and the operating bureaus. The departmental offices are basically mandated to over see the formulation of policies and also the management of the treasury department. The operating bureaus on the other hand are responsible for specific operations within the department (Manning, p23). The main functions of the treasury include the promotion of economic development and control of the government finances. It is therefore solely responsible for advising the President on matters related to economic growth, infrastructure among other governance issues related to finance. The department has the function of the production of coins and currencies and also their distribution within the economy. It is also mandated to collect the revenues such as the taxes and duties due to the US government and also paying bills on behalf of the government. It is also responsible for looking for more funds to run the government in form of borrowing and consequently managing such accounts related to public debt. The treasury oversees the over all operations of the National banks. The main revenues to the federal government are collected by the treasury. In the year 2007, the IRS received a total of $2.7 trillion in the federal tax revenue. Out of this amount $59 billion were collected through enforcement of activities. The annual budget for treasury itself is around $11.10 billion as per the 2007 statistics (US T.W). In 2008 the treasury collected a total of $1.95 trillion from the tax revenues. Currently the amount that is received by the treasury as the federal income is not enough to finance the budget and this has resulted to huge public debt.
Some of the most important programs within the treasury include the TARP Capital Purchase Program, Treasury’s temporary guarantee program for money market funds and the foreign aid programs. The TARP program was initiated to encourage the financial institutions to gather more capital that would enhance the finance flow within the businesses environment and thus within the economy. The treasury planned to purchase shares worth $250 billion within the program. The temporary guarantee program for money market funds is a program that is meant to give confidence to the investors that they will get $1 for each share in the money market. The program oversees the shares in the market both the taxable and the non taxable. It also ensures that the investors comply with the agreements that correspond to the program. They play a very important role in advancing investment within the economy. The foreign aid programs are mandated to over see the foreign assistance to the country. Foreign assistance in the US has been given five categories which include the bilateral development aid, multilateral contributions, economic assistance, humanitarian aid, and the political and security aid. The program has played a major role in the international affairs such as fighting the terrorist attacks and supporting the peace, democracy and also stability motives of economies internationally. One of the programs that have been demonstrated to fail is the TARP program. This is because the program is not transparent enough and fails to guarantee the Americans of any accountability (US T.W). The programs just encourage the Americans to invest in the financial institutions directly but it does not provide any measures on use of government funds which are supposed to reduce the financial crises in the market. Another failed program is the Voluntary correction program. The program failed to implement the definition plans of the program in terms of compensation and also failed to amend the plan for changes in tax. It also failed in terms of loan provisions implementation of rules and also the eligibility of the employers. It is my belief that if these programs were turned into state or local governments they would be more efficient since they would have to make their decision independently. Local government bodies are also more effective since the programs would be monitored by the treasury instead of them being directly implemented by the treasury. It would be a load off treasury and would not have much influence from the treasury. The department has received various criticisms. This includes criticisms related to the TARP program as having failed to stabilize the financial system, the former Secretary Henry, the activities and leadership of the IMF and the World Bank and also the failure to ensure economic growth and stability. The current US president Barrack Obama has picked Timothy Geithner to be his treasury secretary. Timothy has an A.B in government and an M.A in economics and East Asian studies from the Johns Hopkins University. He has held various positions in the government such as deputy assistant secretary of the IMF, senior deputy assistant for international affairs, director of the policy development and review department in the IMF among others (US T.W).
Work cited
Bernard S. Katz. Biographical Dictionary of the United States Secretaries of the Treasury, 1789-1995 Greenwood Press, 1996.
F Milton, AJ Schwartz. A monetary history of the United States. Princeton University Press, 1963
Igor Oleynik.US Department of the Treasury. USA, International Business Publications, 2006
Martin j. Manning.Treasury Department, United States. Gale Group, 2004
US Treasury Website. History and education.