Those European countries,and Rhode Island, have pledged the public credit. Many among us have signed mortgages, pledging our credit. We understood this to mean "pay or die". Why should governments be entitled to take French leave of creditors? "Actions have consequences". These governments may in fact disappear. Well, they were failed governments. They spent themselves into oblivion. If they were democracies, it was done with the consent of the governed.

This is the organization, by the way, that just ruled that water does not prevent dehydration.

"The European Monetary Fund (EMF) would be able to take full fiscal control of a failing country, including taking countries into receivership."

So the one must be prepared to sacrifice itself by and for the collective???

As I understand, countries which joined the EU only did so upon approval by their citizens of a referendum. Was it made clear to voters before or in the referendum that they were potentially handing over sovereign receivership power to the organization that they were voting to join?

Regardless of my own opinions, there is a historical perspective that cannot be ignored. It is generally believed that the demand for "reparations" by the "Allies" following WWI, created an extreme of austerity in Germany. In turn, this gave rise to the acceptability of the National Socialists. I have always regarded this as completely foreseeable, particularly where the former Allies did not have the will to enforce their dictates.

This a situation we would have to avoid. It is quite foreseeable that the former "democrats" will develop a rationale to separate themselves from the actions of their democratically elected government, resulting in civil unrest. Probably with more animus than OWS. That the entire nation might think of itself as "put upon" and unfairly treated to a "stab in the back" by "October criminals" is not an unrealistic assumption.

Warrington,

In modern times, the arrangement has never been pay or die. It is pay, or don't be able to get a reasonably-priced loan again. Once upon a time, we had investors who understood there is very little certainty about the future. They understood that whenever you put your money down expecting a future return, there are no guarantees that it's coming back, so they did their due-diligence, calculated a realistic price of risk, and made good bets. Today, we have a financial class that thinks they are above all of this, and are just entitled to free money becasue of their closeness to government. In this, they are no different from socialists who think they can repeal the law of supply and demand with poltical action.

When the financiers screw up and make bets on governments that are completely detached from economic reality that have no hope of paying off, neither the financiers or the governments assume a right to seize whatever they want from the surrounding society (or to seize the government itself). Governments do not own their societies, even if financiers would like to try to repeal modern governing structures, so that they can claim that they do.

But bringing back pre-modern ideas like hereditary debt and classes of nobility who have permanent, unchangeable claims on the livelihoods of their subjects will eventually bring back a pre-modern economy along with them. And what is commonly called "feudalism" today really wasn't all that great for the privileged class of its age either.

Monique,

Maybe because it's Europe, they are more comfortable with a version of "the King has spoken to God, and they've decided this is the way things will be" than we are over here.

Andrew,

"In modern times, the arrangement has never been pay or die. It is pay, or don't be able to get a reasonably-priced loan again."

Actually it is more like pay, or lose the asset which secures the loan. As you mention, you are also excluded from the American Dream, which I understand in this wise: Seven credit cards maxed-out, living paycheck to paycheck, upside down on the mortgage in a boring house you don't really like, a job you hate but the retirement plan gotcha, your little boy buzzing on force-fed Ritalin, wife and daughter gobbling Prozac and everyone wondering, “Is this all there is?”

"Once upon a time, we had investors who understood there is very little certainty about the future. They understood that whenever you put your money down expecting a future return, there are no guarantees that it's coming back, so they did their due-diligence, calculated a realistic price of risk, and made good bets. "

Once upon a time, and presently, there are "non-recourse" loans. Meaning, pay or we seize your assets, but make no claim of you personal liability.

"When the financiers screw up and make bets on governments that are completely detached from economic reality that have no hope of paying off, neither the financiers or the governments assume a right to seize whatever they want from the surrounding society (or to seize the government itself). Governments do not own their societies, even if financiers would like to try to repeal modern governing structures, so that they can claim that they do. "

You forget that modern governments rule by "the consent of the governed", their every action is validated by the voters. Those very voters desired that the government take those loans,in order to provide largesse to the voters.

"But bringing back pre-modern ideas like hereditary debt and classes of nobility who have permanent, unchangeable claims on the livelihoods of their subjects will eventually bring back a pre-modern economy along with them. And what is commonly called "feudalism" today really wasn't all that great for the privileged class of its age either. "

Surprise, the Greeks and several other European countries have re-invented "hereditary debt". They have so called "generational mortgages", they have a term of 100 years. Succeeding generations are bound to the mortgage, if they desire to retain the property. Just think, you are well into the second generation before you begin to make any appreciable amortization. "every thing old is new again"

"classes of nobility"? I believe we call them "Senators", en masse, "politicians". Don't we refer to governors as "your excellency"? Chapeau!

Warrington,

If bondholders and financiers want to start demanding the assets of the government to pay off debt, deeds to public buildings and such, they can go right ahead. But people are not assets of government. The private property of individuals is not an asset of government, and the future livelihoods of individuals are not assets of government.

What a government owns of its citizens' property as assets, and the most it can ever legitimately consent to give, sell or trade is what is decided upon through a time-limited appropriations process; promises of any more are promises by government to dispose of that which it does not own, and government has no more right to do this than does any other individual or organization in society.

Andrew,

I wouldn't be so sure of that. When citizens empower "duly elected representatives" to incur debt on their behalf, I am not sure why they are not "guarantors" of that debt. I have difficulty in thinking of a democratically elected government as an entity separate from the electorate. To treat it differently is to regard the "government" as an "occupying power". There are some who believe that way, they are usually dismissed as "militia", "right wing extremists", "separatists", "domestic terrorists". etc.

Many years ago, perhaps 25, a friend of mine sued a town in Massachusetts. I seem to recall he succeeded in obtaining an attachment on the property in that town. It may be that he only attached the town's tax receipts from that property. I will have to check with him. I should have paid more attention at the time, I am sure it was an interesting story.

The rules of "land tenure" are distant for me, but I expect "owners" only have tenure subject to the rights of the government. "Ownership" is not absolute, it is defined as a "bundle of rights to the land, superior to anyone else's". I am not sure of the "rights" of government. If I were pursuing it, I would treat the electorate as "guarantors".

Andrew,

I was thinking more about the theory of governance. I am thinking that if the government can declare war, which will necessarily require the death of citizens, it is difficult to think that they cannot encumber the property of the electorate.

It is perhaps a good argument that the Constitution grants the right to declare war, but no "specific right" to encumber property. However, that does seem implicit in the authority to create debt and borrow money. You speak of "public assets" being subject to creditors. Imagine if you will a small town, with rented town offices, that incurs debt. Under your theory creditors would be without recourse. Perhaps they are, but I doubt it. The "taxpayers" are the beneficiaries, why would they not be responsible? PS, there exist towns in which the roads are not owned, they are easements.

So now we've moved all the way to the idea that all property is rented from the government, and government has the right to "encumber" the terms of its rental when necessary -- which is odd, given that the starting point in this comments thread was that a government can't ever encumber certain financial arrangements without losing its right to exist. Apparently there are classes of people who possess rights and privileges to property that the great majority of mere renters don't. And on top of that, we seem to have something of a warning that to challenge the idea that the government owns society or has the power to assign ownership of an individual's livelihood to someone other than the individual himself, is to risk engaging in sedition.

You can't assign one class in society (or the entire government, for that matter) ownership of the future livelihoods of others, without bringing back these kinds of pre-modern beliefs to justify and support them. And if you bring back pre-modern forms of government, you're going to bring back pre-modern social and economic relations along with them.