During second half of eighteenth century, increase in military spending and accumulation of public debt charges sparked intense debate about their impact on Britain. While broader economic and political interests of funding system are beginning to be taken seriously, public debate is largely dominated by concerns about consequences of government overspending.

Modern "theories" of bankruptcy are often dismissed as moralistic Jeremiah by authors unfamiliar with technicalities of public finance, yet they are fundamental to their IT development and are not useless to philosophers.

There is not one but most important prediction of British debt ruin, made by David Hume.

In Political Treatise, first published in 1752, he set out to prove that republican idealization of antiquity was wrong, that modern trade had created prosperity, and that luxuries had helped to civilize Europeans. society, and modern Britain offers its citizens unprecedented civil liberties and security.

On Government Credit Dealing with political and economic impact of public finance, Hume views government borrowing as a modern phenomenon, "a destructive force beyond witness of hundreds of demonstrations of practice."

Hume acknowledges some of virtues of subsidy system, stressing that it necessarily and inevitably damages constitution and economy, that public debt raises food and labor prices, encourages idleness, and raises taxes.

Because resulting tax increase bankrupted poor and countryside, it changed geography of population: people either moved to London to enjoy privileges of capital, or immigrated to other countries to benefit from British debt through investment.

Despite devastating poverty, depopulation and loss of commercial competitiveness, ultimate cause of disaster lies in international competitive system, which is also a source of public debt, although Hume believed that British military involvement was necessary to maintain balance. authorities Yes, but he stressed that "our war with France and more than half of all our public debts owe more to our own thoughtless aggression than to ambitions of our neighbors."

Government loans are an attractive tool for politicians because they allow them to fight unnecessary wars by passing responsibility for paying off accumulated debts to unknown descendants.

Hume's fears stemmed from fact that financial obligations could grow uncontrollably and fact that burden relief was unlikely.

The most optimistic imagination, says Hume, cannot expect that neither this nor any other ministry in future will have such a rigid and steady frugality to make great progress in paying its debts; or, rather, that diplomatic state of affairs will enable them to secure rest and rest for such an undertaking for a long time to come. So what will happen to us?

Modern business in UK faces a difficult dilemma.

To solve it, Hume offers two alternatives:“It really must be one of those two events; either state must destroy public credit, or public credit will destroy state.”< / p>

According to Hume, since all proposals for payment of national debt were impractical or false, most likely reason that government spending reached its limit was a crisis caused by a foreign invader.

If France attacks, disaster awaits Britain, either in form of foreign usurpation or forced expropriation of public creditors, in which case if British government quickly fulfills its duty to its shareholders to protect country, Britain will be conquered and public credit will die "violent death".

On contrary, if government declares bankruptcy and defends itself with interest money, public credit will "naturally die."

While this would leave "thousands buried in ruins", Hume advocated a solution to voluntary bankruptcy problem as millions would be kept safe, but he feared UK would not take such drastic action. accepted in place of an absolute monarch in a free state, whose governing body members were connected with state creditors and sought to avoid bankruptcy in order to prevent their own financial ruin.

The threat posed by public debt to Britain was not only inherent in financing system, but also inevitable. To convey severity of problem, Hume compared current policy of involving state in war against backdrop of huge financial obligations with playing with a stick in a china shop.

Although Hume considered it unscientific and rash to predict future, he proposed a schedule for predicting catastrophe: "a very close period, say half a century."

Instead of offering reader a vision of a post-bankrupt Britain, Hume says only that public credit will not continue to die, but will quickly recover, and that practice of public borrowing to finance wars will continue.

Hume emphasized that this prophecy was not inspired by "divine wrath or madness", and that his prediction of imminent collapse of Britain was based on reason and "the natural development of things and men", and that any flight from "mass madness and delusion" can be seen by anyone.

István Hont, in his subtle and forceful explanation in first edition of Public Credit, Hume described him as calm, cautious, even cautiously optimistic."

However, if we read Hume's assessment of public debt as a prediction of future, Scottish philosopher is deeply troubled. The collapse of Britain seemed necessary, natural and inevitable.

In earlier editions of Public Credit, main threat to Britain's prosperity and independence came from external aggressors after Seven Years' War and ensuing British debt. After growth, Hume added internal causes of catastrophes of 1764

According to him, war has increased threat, Britain has greatly increased its "natural strength", and it is this excess that constitutes source of all existing danger.

Hume constructed a new scenario for Britain's future as follows: land would be taxed to limit due to soaring public debt, trade and industry would be taxed at highest rate, all sources of income would be permanently mortgaged, and these "Seeds of Destruction" led to "an unnatural state of society" in which only public creditors received any income, and this class was notoriously unpatriotic and unreliable; stable.

As a result, existing social order will be replaced by a highly unstable one, making it impossible for states to resist domestic tyrants or foreign usurpers.

Hume explained that most likely outcome of this situation is "a degree of despotism never attained by Eastern monarchies": an absolute sovereign taxing public creditors so that entire income of state is ultimately concentrated in its hands, making him sole owner of all land and production.

Thus, it was possibility of an indefinite increase in public debt, phenomenon of a commercial society and product of war, that reinforced Hume's fears that, according to "natural course of things", he predicted inevitable and imminent catastrophe of overspending.

Government spending is growing faster than revenue sources, and associated taxes are increasing pressure on productivity and consumption.

According to Hume, this development should end in fiscal absolutism or foreign usurpation, with only real option being voluntary bankruptcy, but after that government borrowing will continue, creating same dilemma as before.

Hume's bleak view of Britain's immediate future was widely shared, and "Public Credit" was part of Hume's essays and many long-quoted translations in dictionaries, textbooks, and pamphlets.

Hume's predictions about future of UK have also proven to be highly controversial, with some critics accusing him of being too lenient with public debt, others claiming that he deceived public with his false "pessimistic forecasts". benefits of public debt.

Although many have used him as an authority to warn of catastrophic consequences of funding system, most interesting formulations of Hume's fears came from Adam Smith and Richard Price in midst of crisis.

The predictions of

Hume, Smith and Price about inevitable bankruptcy of Great Britain were further developed after outbreak of war with revolutionary France.

Thomas Paine (1737–1809) wrote The Decline of English Financial System, 1796 while in exile in Paris, and sought to discover principles and extrapolate their political implications,

The headline and cover page of pamphlet make it clear that Britain is in danger of disaster, and in middle of cover page is following quote:"On verge of bankruptcy, even on brink of bankruptcy, parliamentary debate."Payne ignored mention France by Prime Minister Pitt, who issued a statement, creating impression that irreversible process of destruction in UK is in full swing.

Payne argues at beginning of his pamphlet that point at which British financing system reaches its limit can be calculated by analyzing its pattern of development and observing a number of signs of decline. Since Payne's reasoning is based on facts and figures, he argues that his "scientific" approach was more persuasive than those of his predecessors, Smith and Price, which were based solely on assumption that Britain's perpetual debt was "naturally impossible".

Therefore, their predicted timeline for collapse remains vague. Despite these criticisms, Payne relied on government debt data provided by The Wealth of Nations. In 100 years since introduction of funding system Britain has reached six wars, Payne has deduced a pattern, "ratio", to determine price and timing of collapse of future wars.

Payne emphasized novelty of his move in existing public debt debate, stating that "no one thinks there is or can be a ratio that would define such a question."

The UK debt has grown neither in "arithmetic progression" nor in "geometric progression", but rather "in every previous numerical halving". > Applying this ratio, Payne determined the future growth of government overspending.

The next five wars will increase Britain's debt to £320m and tax burden to £128m. "Is there anyone so crazy, so stupid that system can work?" he asked .

In addition to accurately measuring recessions, Payne perfected bankruptcy techniques inherited from his predecessor. The disaster meant not inability to get loans, but ease with which British government could accept new loans.

According to Payne, within next twenty years a new war will break out with inevitable bankruptcy, a prediction confirmed by thesis: a war that has never lasted more than two decades.

However, next war would drain country's resources, and a sharp increase in debt and taxes would devalue paper money to such an extent that Bank of England could not guarantee its value with its gold and silver terms, and as a result of bankruptcy, Payne mentioned examples of France and United States, predicting that this would inevitably lead to a revolution in government.

To explain why Britain's debt could not continue to grow without limit, Payne referred to "Creation Project", from beginning of world, existence of all things depended on death of old and death of new inheritance.

The examples of man, animals and plants show that nature "always works, renewing sequence, and not constantly accumulating addition."

Expecting a funding system to last forever is as foolish as expecting immortal beings to live together in eternal youth.