The burden of debt on future generations
The federal government's spending addiction is reaching perilous new levels. With three months still to go in the fiscal year, the deficit has reach nearly $750 billion -- meaning a $1 trillion deficit is not out of the question.
What is in question, at least in some circles, is whether all that red ink really matters. After all, interest rates are low, the economy is growing, so why not run up the credit card while we can? Fortunately, there are still those who understand the drag deficits impose on the economy. Prof. Don Boudreaux reminds us of the costs and consequences of government debt, with reference to the work of Nobel Prize winner James Buchanan:
In effect, debt financing allows government to spend money today while foisting the tab on future taxpayers – many of whom, literally, aren’t yet born. Politicians eager to win votes are thus prone to borrow and spend excessively because borrowing allows the current generation to free-ride on the incomes of future generations.
Unfortunately, too few people bother to think carefully through the economics of government taxing, spending, and borrowing decisions, yet everyone can easily see the programs funded with today’s expenditures.
Today’s looming fiscal mess is the predictable consequence of politicians’ ability to spend today and to stick our children and grandchildren with the bill.
The trillion dollars we add to the debt today only increases the burden on those unborn generations. They will write the histories and commentaries upon our actions. We suspect their assessments will not be kind.