Governments are always tempted to use their central banks and treasuries as their own personal money pots. Since the creation of the first central banks in Western Europe in the seventeenth century, governments have succumbed to the temptation to borrow from the monetary authority to fund government-sponsored enterprises, private enterprises, and sometimes even the treasury. The temptation continues because, who better to fund expansion off-budget than the creator of money, itself?

It is interesting to illustrate how our current...