Nope, wasn't saying any of those things. I certainly wasn't advocating removal of legal rights to recourse. This was a question of morality, and I'm saying morals don't enter into it. You are not lent to on a moral basis, and are not therefore a borrower on a moral basis. This is not a friend lending you money, this is a financial institution, you are bound by contract, not morals.

Also, the OP was definitely talking about international debt. Just checked, it was talking about countries spiraling into debt.

I think it is neither right nor possible to ignore the rest of the world. Even if you can not decide the government of another country.
Everything that happens in the world has an impact on all (the more impact it has on those close to the event, but all suffer the consequences in reality).
I think that solves the conflicts and bad situations (the Greek crisis, the wars in the Middle East etc ...) is the best way to improve the situation in general.
In a better world, we all live better.

Blaming someone that he was wrong to have given confidence to the wrong person and leave him to his fate, is not only wrong, is not only useless for the general welfare ... it also worsens the living conditions of those who take this decision.
Also sometimes you have to make the right decision even if it means worsen your situation in the short term.

The responsibility is there but must be weighed according to the situation. An unconscious and collective error weighs much less than a conscious and individual error.

If you want to take this approach then you need to clearly frame what the actual choices at hand are. An existing government debt is a non-negotiable fact, so all that remains is a choice of how to deal with it, all of which have consequences for the citizens (you can cry all you want about how it isn't fair that you now have to face the consequences of what previous generations did, but all those creditors really couldn't care less about that). For the question of whether to take on additional debt, there are again consequences for the citizens regardless of what is chosen. You can ask people if they think the government should take on debt and they'll say no, but then ask them if the government should make hefty cuts to many of its programs (which couldn't be funded without taking on that debt) and they'll also say no. People have a very difficult time reconciling the consequences of such decisions, particularly when they have to deal with downsides regardless of which decision is made (of course, the "out" people often try to take is to say that the government should just cut programs that said person doesn't use, but not touch the programs they do use, since those are clearly very important programs). In short, we tend to get the kind of government and government policy we deserve.

I consider that as an idealistic, but also a very naive and unrealistic view of the world.

Plus, it is not as black and white as you make it to be. It is not about completely ignoring the rest of the world, or taking a full responsibility over each and everyone in the whole wide world. Even North Korea interacts with the rest of the world, in their own ways.

Yes, they should factor in the risk, which is exactly why e.g. Greece couldn't get more money from the market at least for sane terms anymore. The risks had risen too high for the creditors finally.

I also said asking who is "morally responsible" for the debt is the wrong question. The right question is who will feel the sting from the debt. In a bad situation both the creditors and the citizens will. I don't think the Argentine people survived fully unscathed by their government's decision to default. It was not like Argentina simply declared that it will not pay its debts, and then Argentina was off the hook.

https://en.wikipedia.org/wiki/Argentine_debt_restructuring

Well then, didn't the lenders factor the risks "correctly", because the EU countries took the debt from their hands, which was possibly what they were expecting? The creditors did lose some of their money in the process, but it was a small price for them to get off the hook completely.

I for one was very much against EU countries taking the debts from the hands of German/French/British banks. Why the euro countries allowed it to happen, probably just lots and lots of lobbying from the aforementioned countries so that they wouldn't have to save their national banks alone, but get all EU countries to help with that. And UK didn't have to participate in it at all, those freeloaders. It was sold to other EU countries, and especially their citizens, with claims of it being human aid to Greek people, while that was not the primary target. Yes, I am miffed also at the Finnish government of the time for not having balls to say no, in accordance with the Maastricht Treaty.

Also Greece didn't definitely mind it either. as Euro countries offered much nicer terms than the private creditors. As for why the Greeks didn't and don't want to leave Euro themselves and let their debts default, I guess you need to ask them. I presume they feared it would be even a shittier road for them. Greece basically had only bad options in its hands, and have probably chosen largely what they believe to be least painful.

What about conscious and collective (I could do something about it, but I'm sure someone else will do it instead) or unconscious and individual (What do you mean that had I not gone left instead of right the accident would have been prevented?).

And yes, of course responsibility must be weighed according to the situation. See the Ronald Opus story, and see how each person's responsibility changes with each paragraph. Same person, different facts, different responsibility.

Ok. What I thought you were getting at was that somehow self interest is ok reason to break contracts against the other's will, but it's not ok to enforce contracts against the other's will.

Or put another way, there are moral and logical reasons to look at contracts in a more strict way then what I thought you implied when you said, for example, that "The only person responsible for any debt is the person that lent the money. ... they factored in a risk that the debt wouldn't be repaid. In doing that they removed all moral responsibility that you had to repay it, ..."

But glad I was wrong about that, and you do consider the borrower somehow responsible for paying back - even if not morally. :) Thanks for clarifying.

I do insist you are wrong about the OP being about international relations and international debt holding though. Please consider the relevance of the pronoun in the very title: Are citizens responsible for the debt incurred by their government.

Politicians will do whatever they want with tax money and the handling of international trade arrangements, the population does not vote on these matters, so 'no' ... citizens are not responsible for government debt: no vote = no responsibility. A politician's loyalty is always to his business partners and friends, not the populace.

I think you argue from some kind of morale which is understandable but then also not.

Let's start with the question:

Responsible? To whom? God, International law (which doesn't exist). National law (but what if the creditor is from another country)

So it's already got a problem.

On the other hand: some generations have a positive balance sheet, some have a negative balance sheet. That's not really uncommon. Some build others consume.

Everything that is not forbidden is allowed. So why should it be forbidden for a state to pile up debt, maybe even go bankrupty? It's means freedom to be able to fuck up (although not very wise). Argentina for example did it in 1990-2000 and they recovered from it.

Sensible policies in sensible communities usually prevent such behavior but why shouldn't you have the freedom to act stupid.

And the debt one one guy is the wealth of others. So there is always someone somewhere who could be taxed. Governmental debt can be seen as taxes not yet collected (or as a Ponzi scheme, depending on your view).

In the end: the best is either to not pile up a big debt at all or if you do it, do it excessively, do it so much, people will be astonished by the sheer volume, then devalue the currency by a large factor with many zeros and then pay back. (Hint: Make sure the debt is nominated in your currency and you have full control over it, otherwise you have a problem.)

If all credit ever would be paid back, we wouldn't need risk premium on interest rates.

If I perform a service to which you have not agreed and did not want, should you have to pay me for it? Does it matter whether or not you benefited in some way from the service if you did not consent to it?

Contracts derive their legitimacy from our voluntary agreement to terms. Is the national debt a legitimate contract? Does it have the consent of those responsible for its payment? Is the concept even compatible with democracy?

Each generation of citizens decides for themselves the amount of taxation they will tolerate, and most of us more-or-less accept democratic process as a sufficient means of resolving this decision. But even if we grant the legitimacy of taxation itself, how can it be just for a generation of voters to reduce their own tax burden at the expense of future generations who will have to suffer the consequences?

And what of those in the current generation who object? Taxing Ricky is one thing; his money is taken in a straightforward fashion, and his choices at the ballot box are clear and their results obvious: To approve current services and their consequent taxes, or vote for lower taxes and reduced government spending. But if a government can accept debt on behalf of citizens, hasn't that vote been significantly weakened? What had been an effective check on the size and scope of government is now irrelevant in practice; a demand for lower taxes can be met with more borrowing. Spending continues unabated and citizens are still on the hook. What's more, the entire issue is much less comprehensible to the average voter, and they are shielded from the consequence of their vote (by transferring their tax responsibility to future generations).

There are some things for which "the consent of the governed" (i.e. the whim of the majority at a particular time) is not sufficient justification. This is why individual rights are so important, and this issue has me thinking that some kind of explicit "right of the people to be secure against indenture to debt on behalf of their government" (perhaps with a caveat for defense: "except as regards the defense of their sovereignty") should be codified in our constitutions. This would force an honest rate of taxation to meet spending and wake people up to the true costs of their out-of-control governments.

Re: "move" or "revolt"... There's a lot to be said there, but not by me, at least not now. I need sleep. ;)

I didn't start the thread thinking about default as the preferable option... but yeah, I suppose I'm leaning that way to some degree as we explore the issue. I resist the conclusion because I do think that we should keep our word and honor our contracts, but... well, see my reply to timppu above. The question becomes whether it is better to default or to balance the budget, pay the debt, and make constitutional changes to prevent this from happening again.

No worries, you are reading an implication of preference when I just pointed out you saw it as acceptable.

As per the parallels I'm drawing I understand perfectly that it's a choice of lesser evil and very subjective. How does one decide when to breakup a relationship? To initiate a divorce? To abort? To quit a job? To immigrate? To have an affair? To pull the trigger? To declare independence?

The more I think on it the more I think our divisions over choice and consequences in society will only be resolved through fragmentation. That does not make me particularly happy...

PS: Taking the opportunity, there were some conversations on this kind of topic (social contract and self interest) in Slate Star Codex recently. Do you read it?

Actually I think defaulting is not the worst. After all it is the acknowledgement that the debt is just too high and can never be paid back. The idea is then to cut the debt so much, that the creditor is payed back as much as possible. Obviously there exists a maximum because asking for too much will result in incapability to deliver. The only open question is how the losses are distributed and there I would say, they should be equally split between all involved parties. I'm a bit imprecise here and there is certainly no international law about defaults of countries existing yet, but in case a loss occurs, it has to be split and surely there is some notion of what a fair split is. And well, the creditor cannot expect to be paid back everything anytime anyway - that's why there are risk premiums on the interest rate.

Only thing left is defining what is fair. I think it's fair to hold the next one or two generations responsible for the deeds of their parents and in case of countries to expect annual amortization pay back rates of about 3% of the GDP (with interest about 5-8%) not more and only if the economy is growing and only for about 40 years max. But in the light of this it's probably advisable to avoid such situations and have debt limits on a constitutional level so that every generation kind of pays for itself.

Also if the debt is held in local currency - a higher inflation target (say 4% instead of 2%) could be beneficial too, it would depend on the development of the unemployment rate and economic growth.

The issue under the rug is that international enforcement of "contracts" is called war.
And that absolute refusal to go to war incentivizes defection from contracts well before the defaulter is at the "too high and can never be paid back" level. Not that such level is easy to define objectively anyway, since never is kind of infinite. ;)

That question depends of what you mean by 'responsible'. The public may not have had a direct part in causing the debt but for the most part the basis of society is the idea of collectively working to maintain the system to everybody's benefit, so in that respect yes - we are all responsible.

International enforcement of contracts isn't called war. Just state something like in case of disagreement there will be this court consisting of that people and working under this law and all signers agree to obey the outcome no matter what.

I'm sure we can do without war largely.