8
Question No. 2.
Accepting Mill’s principle that our internal Debt could be
abolished by a rearrangement in the ownership of the Nation’s
Capital Wealth, and leaving for the time being the considera
tion of a plan for effecting this, let us discuss next the second
question of our series, “ What would be the resultant economic
gain ? ’ ’
At the outset, we must remember that conflicting views
have been and still are very generally held concerning the
advantage and disadvantage to a Nation of a National Debt.
During and after the Napoleonic wars even poets became
engaged in controversy on this subject, and Byron—if I recol
lect aright—satirises the statements of his fellow-poets ‘ ‘ who
call Debt blessing.” It is urged that a Debt benefits the
Nation by affording an outlet for safe investment by the
thrifty; that the indirect benefits derived from the capital
outlay of the Debt greatly exceed any loss to the Nation;
that interest being raised within the Nation by taxes and
spent within the Nation, it follows that no real loss to the
Nation is involved. Now, each of these contentions is in the
nature of a half-truth. The answer to the first is that thrift
in the individual, by the individual, for the individual, does
not necessarily involve the benefit of the Nation; and that the
provision of a safe investment for capitalists is not the direct
concern of Government, as the capitalists are only a section of
the Nation, and Government is trustee for National not
Sectional interests.
The answer to the second contention, that indirect gains
may offset direcE losses, is only applicable where the Capital
outlay of the Debt has been for works of utility, like Harbours,
Roads, etc., etc., and even in this case, if such works be
needed, and the wealth of the Nation will allow, it is arguable
that taxation for such purposes is preferable to borrowing,