I didn’t link to the Samizdata article because it was a tad unsavoury.

After writing this article, I came across one from Murray Rothbard in 1992, “Repudiating the National Debt”.
http://www.mises.org/article.aspx?Id=1423
http://www.lewrockwell.com/rothbard/rothbard198.html
http://www.lewrockwell.com/rothbard/rothbard190.html

Rothbard first ponders whether bankruptcy laws are just. Then he explains that government debt is unjust and wrong, using much the same reasoning as I have above.

In the comments at http://econlog.econlib.org/archives/2004/01/government_vs_p.html, someone points out some good rhetoric: “The classic republican argument is that taxation without representation is unjust. Those who have to pay the enormous deficits [people not yet born] get no say in determining those deficits and have to shoulder the interest costs and higher taxes to cover them.”

I’d really like someone to write an article arguing this for Varsity or The Cambridge Student next term.

“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.”

WoN, Book 5, Chapter 3, “Of Public Debts”

“By 1946, our national debt was an humongous 250% of GDP – even worse than the 100% we’re facing now. Yet, although it took us three decades, by 1974 we’d got it down to a manageable 50% of GDP. So how did we do that?

…

Well, what do you know? Although over these three decades we reduced our debt burden from 250% of income to 50%, we actually made no net repayment at all. In fact, we doubled our outstanding debt.

The trick?

Oh, you guessed.

Over those three decades, money GDP increased nearly sevenfold, so as a percentage of GDP, debt fell sharply.

But here’s the scary bit – of that sevenfold increase in money GDP, the vast bulk comprised inflation. In fact, over the period as a whole, inflation eroded the real value of government debt by nearly three-quarters.

Or as we creditors say, HMG defaulted on three-quarters of what it owed to the poor schmucks who’d been stupid enough to lend.

In ten years time, please don’t say you weren’t warned.”

http://www.iea.org.uk/record.jsp?type=book&ID=409