Thomas Jefferson said spending money to be repaid by posterity is "swindling futurity on a large scale." There is, however, no injustice in borrowing from the future to fund public goods — those from which all citizens, present and future, will benefit. Such goods — physical (roads, dams, harbors, defense) and intellectual (education, scientific research) — are the infrastructure enabling society's dynamism. The swindle that has become normal is perpetrated by generations in power funding their consumption of government goods by burdening — borrowing from — future generations.
This practice stores up risk. The higher the national debt as a percentage of GDP, the less leeway government has to respond to recessions or other economic shocks. The Committee for a Responsible Federal Budget says the government entered the last two recessions with the national debt at 35 percent and 80 percent of GDP, respectively. Today it is 100 percent.
If we have banished the business cycle, relax. If not … "The first principle is that you must not fool yourself," said the physicist Richard Feynman, "and you are the easiest person to fool."
This practice stores up risk. The higher the national debt as a percentage of GDP, the less leeway government has to respond to recessions or other economic shocks. The Committee for a Responsible Federal Budget says the government entered the last two recessions with the national debt at 35 percent and 80 percent of GDP, respectively. Today it is 100 percent.
If we have banished the business cycle, relax. If not … "The first principle is that you must not fool yourself," said the physicist Richard Feynman, "and you are the easiest person to fool."
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