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Hume and Debt

January 16, 2004

Re: Rothbard on Debt:  The argument that "we owe it to ourselves" when it comes to government debt is even older than Keynes and his followers --especially Abba Lerner who emphasized this idea.

David Hume refers to the popularity of this idea -- of which he is critical -- in his essay "Of Public Credit."  It is available in Hume's collection, "Essays: Moral, Political and Literary" reprinted by the Liberty Fund (pp. 349-365).  The entire essay is a blistering attack on deficit spending by government and its harmful consequences to the economic health of the society.  Specifically, on this point, Hume says:

"We have, indeed, been told, that the public is no weaker upon account of its debts; since they are mostly due among ourselves, and bring as much property to one as they take from another. It is like transferring money from the right hand to the left hand. . .Such loose reasoning and specious comparisons will always pass, where we judge not upon principles. . ."

 

 

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