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When the federal government first entered into significant borrowing, the debt was excused under the pretext that “we owe it to ourselves”. I.e., the feds borrowed money from the American people and would have to repay the debt (and interest) to the American people. America would not be significantly hurt by these debts.
The idea that “we owe it to ourselves” is a fairly reasonable argument because it presupposes that the American people could control the magnitude of the federal government’s debt by their willingness or reluctance to lend to the federal government.
So long as the feds borrowed only from Americans, If Americans didn’t consent to lend more money to the feds, the feds would have to operate “hand to mouth” based strictly on its annual revenues. Americans could compel the gov-co to “balance the budget” by simply refusing to lend it more money.
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