America’s total consolidated public debt, as reported by the U.S. Treasury, is now over $19 trillion. So it was inevitable that Donald Trump would be asked how he proposed to tackle what many economists view as a significant drag on an American economy marked by sluggish growth since 2007.

When queried if America should pay its public debt in full or try and make a deal with its creditors, the self-described “king of debt” gave answers that “evolved.” But his early responses reflected the experience of business leaders who deal in corporate debt everyday: he would re-negotiate the terms of the agreement with America’s creditors.

Alas, public debt — or, more precisely, sovereign debt — is different from private debt. For one thing, sovereign states are not businesses. Unlike businesses, for example, the U.S. government has a monopoly of the money-supply. It can thus alter the terms of America’s public debt in ways private debtors can’t. As Trump later said, “You never had to default because you print the money.” That’s the approach followed by twentieth-century fiscal exemplars such as Weimar Germany and Robert Mugabe’s Zimbabwe.

Underlying all this, however, is a problem that goes beyond Donald Trump. Put simply, far too many governments don’t acknowledge that they aren’t exempt from the moral responsibilities associated with borrowing.

The Foundations of Public Debt

Even today, the first of America’s Secretaries of the Treasury, Alexander Hamilton, remains a controversial figure. It’s hard, however, to disagree that Hamilton set America on the path to becoming a dynamic capital-intensive economy. Key to that transformation was Congress approving most of Hamilton’s plan for dealing with the debts incurred by many of the states and Congress, especially during the Revolutionary War.

In his 1790 Report on Public Credit, Hamilton argued that the establishment of a public debt by which the new Republic assumed all these debts would simplify affairs and create the basis for the credit of what was, after all, supposed to be a sovereign state. With this credit established, Hamilton maintained, many Americans and foreigners would invest in government securities. According to Hamilton, the consequent capital inflow would provide the fuel for a takeoff of the American economy.

Hamilton’s plan had most of its anticipated economic effects. The stabilization of the price of government securities, for example, meant that wealthy Americans who had been reluctant to invest started doing so. Above all, foreign capital started surging into the United States, aided by the fact that war had broken out in Europe.

At the foundation of Hamilton’s system, however, was a very basic principle: that creditors should and would receive what they were owed. If investors were confident that government securities would be repaid in full, then they would invest.

What thus truly mattered was trust that the government would make good on its repayments. As Hamilton put it, “Opinion is the soul of it.”

Such confidence, however, wasn’t only a question of investors calculating that the American Republic was more likely to meet its debt-obligations than, say, the late-eighteenth century France whose revolution was partially triggered by national insolvency. The successful maintenance of a nation’s public credit, Hamilton believed, also required certain moral commitments. There were, Hamilton wrote, “considerations of still greater authority” applicable to sovereign debt questions, these being directly derived from what Hamilton called “immutable principles of moral obligation:” i.e., a willingness to fulfill promises.

Making — and Breaking — Promises

This language of responsibility and obligation permeated most of the discussion of sovereign debt that informed Hamilton’s thought on this topic. But much of this literature was equally attentive to the fact that most governments’ track-records regarding sovereign debt were, at best, mixed. In his Wealth of Nations, Adam Smith noted:

When national debts have once been accumulated to a certain degree, there is scarce  …  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.

Among other things, Smith was thinking here of currency devaluations. These, he maintained, benefited “the idle and profuse debtor at the expense of the industrious and frugal creditor.” While the original promise’s formal structure was maintained, governments used their power over the money-supply to unilaterally alter the terms of agreements with creditors.

This isn’t a peculiarly modern insight. Reacting to the habit of medieval monarchs debasing their currencies to reduce state debt, the French bishop and theologian Bishop Nicole Oresme of Lisieux claimed in his Tractatus de origine Natura Jure, et Mutationibus Monetarum (1355) that such debasements were usually unjust because they allowed governments to avoid paying what they really owed. Echoing these concerns two centuries later, the Jesuit Juan de Mariana observed that many governments resorted to currency debasements to avoid making the cuts in public expenditure often needed to get public debt under control.

One can’t help but think that some contemporary politicians’ public spending proposals suggest that they don’t take the moral obligation for governments to pay their debts seriously. One recent study indicated that the economic plans of another populist — Senator Bernie Sanders — would augment America’s public debt by a whopping $18 trillion over the next ten years. Should this ever come to pass, one can imagine a Sanders Administration adopting a position similar to some of the Donald’s earlier reflections on how to address America’s public debt challenges.

In his 1790 report, Hamilton stated that he wanted to see “incorporated as a fundamental maxim in the system of public credit of the United States that the creation of debt should always be accompanied with the means of extinguishing it.” He wasn’t only speaking of the fiscal ability to do so. Hamilton also had in mind the moral responsibilities attached to any exercise in borrowing. That doesn’t mean that governments must sacrifice a society on the altar of debt-repayment. It does mean, however, that America needs to think far more seriously about the morality and justice of public borrowing.

In an age of populism, the need has never been greater.

Samuel Gregg is Research Director at the Acton Institute and author of For God and Profit: How Banking and Finance Can Serve the Common Good (2016).