Posted Feb 27, 2013 by Martin Armstrong
First: Hamilton’s comment demonstrates that EVEN the Federalists were more respectful of the limitations on government than what we have today. Of course, Jefferson’s arguments would be the best. That is not the point. The point is even the worst at the birth of the USA was far better than what we have today.
Secondly, one person commented “You seem to be confused. The other day you were saying that the bondholders who were stupid enough to lend to obviously bankrupt nations deserve to lose their money and today you are lamenting [t]hat not all debts have to be repaid. Which one is it?” Government always default and never pay back their debts. The most popular is change the government structure and previous debts magically vanish. The USA never paid the debt of the Continental Congress just as any government in Europe never paid off the debts of the previous government before a war. So, those who invest in sovereign debt are fools and we should just admit that governments do not have to honor their debts – they are always exempt from the law.