A Manifesto Against Borrowing

by Conor Friedersdorf

Jacques Attali issues the warning:

The power of sovereign states can foster a sense of impunity that encourages excessive debt. In the past, sovereign states have sometimes rid themselves of creditors by simply driving them out (as they did repeatedly with Europe’s Jews), by tormenting them, or by simply refusing to pay. When modern states borrow from a range of anonymous investors on global markets, sovereign immunity protects their assets against seizureChina cannot seize the White House as collateral for U.S. Treasury debt. But creditors can still negotiate, even with sovereign debtors.

When a state loses the market’s confidence, the threat of a financial cutoff is a jolt back to reality. Just ask Greece, as its leaders scramble to reduce its public deficit as quickly as possible. 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 growthfor those who put in the effort, and for those with the audacity to see it through.

One reason that the United States cannot get spending under control is the difficulty of convincing ourselves that we could suffer the same fate as Greece. It doesn't seem possible – and I say that as someone who very much thinks that it is.