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Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes. -Jacques Attali
A government debt is a government claim against personal income and private property – an unpaid tax bill. – Hans F. Sennholz
The West and the Tyranny of Public Debt
Today, western democracies have loaded debt on future generations. Jacques Attali, a French economist, incisively states the relationship between government debt and the rise and fall of great nations. In Newsweek, Attali states the danger to peace, prosperity and our civilization.
The history of public debt is the very history of national power: how it has been won and how it has been lost. … But never, outside periods of total war, has the debt of the world’s most powerful states grown so immense. Never has it so heavily threatened their political systems and standards of living. Public debt cannot keep growing without unleashing terrible catastrophes.
Perceptively, Attali recognizes the root cause – the politician’s lust for power, which is obtained by using the resources of others. Attali writes: Dreams and impatience have always driven men in power to draw on the resources of others—be it slaves, the inhabitants of occupied lands, or their own children yet to be born—in order to carry out their schemes, to consolidate power, to grow their own fortunes.
Presently in the western nations, democratically elected politicians have loaded debt on future workers. Despicably, they have burdened the most vulnerable and the least represented in a democracy – the young and unborn. Attali recognizes the future burden … the very nature of public debt: it is an obligation handed down from the present generation to future ones.
Excessive government debt and the resulting tragedies have occurred over three hundred times between 1800 and 2009. Economically and culturally vibrant nations and empires reneged on their financial obligations with terrible consequences. For example, Spain, Amsterdam, Venice, Germany, France all defaulted to some degree and not only lost their great economies but suffered terrible civil wars and declines. Often terrible genocides and banishments of minorities occurred.
Attali cogently describes the danger of debt and the potential catastrophe, but writes sparsely on the solutions. However, he outlines the options:
(1) higher taxes;
(2) less spending;
(3) more growth;
(4) more lenient interest rates;
(5) worse inflation;
(7) external aid; or
Attali avers that only growth is viable, but only outlines the tasks required by government:
The West needs to wake up now, shake off the yoke of public debt, and take the path of liberty. That path is long and difficult. It means balancing budgets and stabilizing the financial sector. But the great reward will be a return to confidence and growth—for those who put in the effort, and for those with the audacity to see it through.
Fortunately, some excellent American thinkers have proposed solutions, which will be covered in following posts.