Introduction
constant watching, that pernicious proclivities are built into it.
A few illustrations of the temper of our times come to mind.
The oft-used statement that "we owe it to ourselves," in relation to the debts incurred in the name of the State, is indicative of the tendency to obliterate from our consciousness the line of demarcation between governed and governors. It is not only a stock phrase in economics textbooks but is tacitly accepted in financial circles as sound in principle. To modern bankers, a government bond is at least as sound as an obligation of a private citizen, since the bond is in fact an obligation of the citizen to pay taxes. No distinction is made between a debt backed by production or productive ability and a debt secured by political power; in the final analysis a government bond is a lien on production, so what's the difference? By such reasoning, the interests of the public, which are always centered in the production of goods, are equated with the predatory interests of the State.
In many economics textbooks, government borrowing from citizens, whether done openly or by pressure brought upon the banks to lend their depositors' savings, is explained as a transaction equivalent to the transfer of money from one pocket to another, of the same pants; the citizen lends to himself what he lends to the government. The rationale of this absurdity is that the effect on the nation's economy is the same whether the citizen spends his money or the government does it for him. He has simply given up his negligible right of choice. The fact that he has no desire for what the government spends his money on, that he would not of his own free will contribute to the buying of it, is blithely over-
