Government vs. Private Debt
By Arnold Kling
A reader points to a fresh post on the Mises.org web site of a decade-old piece by Murray Rothbard arguing that the Federal government should not be allowed to create obligations for future taxpayers. One solution he proposes:
I would advocate going on to repudiate the entire debt outright, and let the chips fall where they may.
I think that it would be consistent with the letter and the spirit of this article to repudiate the obligation to pay Social Security and Medicare, also, since these represent claims on future taxpayers.
There are many peculiar things about Rothbard’s suggestion. What is most striking to me is that the people who really have an interest in repudiating the debt are too young to vote or not even born. On the other hand, the people who have the most to lose from debt repudiation (but not from repudiation of entitlements) are foreign lenders. The people who have the most to lose from repudiation of entitlements are dominant in the electorate. I don’t think that they would let the “chips” fall on them.
For Discussion. Has Rothbard identified a genuine moral problem with the government issuing debt?