When national debts have once been accumulated to a certain degree, there is scarce, I believe, a single instance of their having been fairly and completely paid. The liberation of the public revenue, if it has ever been brought about at all, has always been brought about by a bankruptcy; sometimes by an avowed one, but always by a real one, though frequently by a pretended payment. The raising of the denomination of the coin has been the most usual expedient by which a real public bankruptcy has been disguised under the appearance of a pretended payment.
About this quote
- What does it mean?
- Governments rarely pay off national debts fully; they usually default or devalue currency. Pretended payments often disguise real bankruptcy.
- In plain terms
- Countries rarely pay debts honestly; they usually declare bankruptcy or reduce currency value.
- What can you take from it?
- Public debt is often resolved through default or devaluation rather than repayment.
Where it applies
Putting it to work
Questions to consider
- How do governments manage debt?
- Is bankruptcy inevitable?
Another view
Sometimes debts are paid through growth or tax reforms.
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