No Debt, No Debt Ceiling

It’s been major international news that although the U.S. worked up to the deadline to get a bill passed that would stave off a credit downgrade, its credit was still downgraded. A part of the U.S. solution was to raise the debt ceiling. My response? Find out what would Julius Caesar have done (and reserve judgment). To that end, I’ve been reading articles on taxation and economy in Rome. So far, it has impressed me that Republican Rome and at least part of the period of the Roman Empire gathered the taxes it needed before it spent them. No debt ceiling to raise.
Taxation wasn’t the only source of income for Rome. Government officials lent money to individuals at interest. In Pliny the Younger’s correspondence with Trajan, he asks what he should do about a stockpile of money that no one wants to borrow at the going rate. Trajan says to lower the rate.

LXIITo the Emperor Trajan

…. For as on one side there are few or no opportunities of purchasing land, so, on the other, one cannot meet with any person who is willing to borrow of the public (especially at 12 per cent, interest) when they can raise money upon the same terms from private sources. You will consider then, Sir, whether it may not be advisable, in order to invite responsible persons to take this money, to lower the interest….

LXIII

Trajan to Pliny

I agree with you, my dear Pliny, that there seems to be no other method of facilitating the placing out of the public money than by lowering the interest; the measure of which you will determine according to the number of the borrowers….

Pliny Translated by William Melmoth [revised by F. C. T. Bosanquet]

Here are some articles on the general topic:

  • “The Supply and Use of Money in the Roman World 200 B.C. to A.D. 300,” by Christopher Howgego; The Journal of Roman Studies, Vol. 82 (1992), pp. 1-31
  • “The Perils of Privatization: How the Characteristics of PrincipalsAffected Tax Farming in the Roman Republic and Empire,” by Edgar Kiser and Danielle C.

    Kane; Social Science History, Volume 31, Number 2, Summer 2007,

    pp. 191-212

  • “The Grain Trade under the Roman Empire,”by G. E. Rickman;Memoirs of the American Academy in Rome, Vol. 36, The Seaborne Commerce of Ancient Rome: Studies in Archaeology and History (1980), pp. 261-275
  • “Economic Association The Economy of the Early Roman Empire,” by Peter Temin;The Journal of Economic Perspectives, Vol. 20, No. 1 (Winter, 2006), pp. 133-151
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