While we’re in a serious sovereign debt crisis, I’d like to play a little thought experiment.
Imagine that Ben takes out a loan in my name, to fund his own spending that I do not consent to. The nature of the spending isn’t relevant. After spending the money, he comes to me, demanding that I pay back the full amount of the loan. I’m slightly taken aback, as I never signed a contract, or agreed to pay a penny. Ben then threatens to break my legs if I don’t repay the loan in full to the bank.
Or perhaps imagine that Ben points a gun at my ten year old son and demands that he must start paying back Ben’s loan as soon as he starts to earn money – and if it doesn’t, he’ll hunt him down.
The only difference between this scenario and government debt is that this is legal when done by the government. If any private individual or company did this they would be acting illegally. The gall of it is that while if I am threatened by Ben, I can call the police, when I am threatened by the government, the police are there to ensure my compliance.
Inspired by Tom Woods and his awesome book Rollback.