Government Debt and the Libertarian Solution
The Ethics of Liberty", chapter 24, paragraph 5:
Many libertarians fall into confusion on specific relations with the State, even when they concede the general immorality or criminality of State actions or interventions. Thus, there is the question of default, or more widely, repudiation of government debt. Many libertarians assert that the government is morally bound to pay its debts, and that therefore default or repudiation must be avoided. The problem here is that these libertarians are analogizing from the perfectly proper thesis that private persons or institutions should keep their contracts and pay their debts. But government has no money of its own, and payment of its debt means that the taxpayers are further coerced into paying bondholders. Such coercion can never be licit from the libertarian point of view. For not only does increased taxation mean increased coercion and aggression against private property, but the seemingly innocent bondholder appears in a very different light when we consider that the purchase of a government bond is simply making an investment in the future loot from the robbery of taxation. As an eager investor in future robbery, then, the bondholder appears in a very different moral light from what is usually assumed.And there you have it. Number 1, don't buy government bonds, and number 2, if you do, you have no right to payback, ie. from future plundered loot. Therefore, the US government, and all governments, should default and repudiate their debt, cut spending, live within their means, and finally, shrink their budgets drastically (to non-existence). That's the only truly libertarian solution to the government debt problem. Anything else is hacking at the branches instead of striking the root.