Smith’s problem with debt is that states, unlike merchants, are not by nature savers. Indeed, to his regret, “the parsimony which leads to accumulation has become almost as rare in republican (merchant-run) as monarchical governments.” As a consequence, merchants are indirectly saddled with “enormous debts which at present oppress, and will in the long-run probably ruin, all the great states of Europe.”

Mark Blyth, Austerity, loc. 302