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Really it comes down to the present net value of future opportunity cost: of economic growth outgrows the compounded future cash flows to service the debt (part
by qubex 7y ago
Really it comes down to the present net value of future opportunity cost: of economic growth outgrows the compounded future cash flows to service the debt (particularly if debt principal and at least part of the interest due) can always be rolled over for the foreseeable future within the temporal horizon, it makes sense to accrue debt.
We’re arguably lumbering future generations with just as much when we do not invest in basic science and technology development because of debt concerns; when we do not service our infrastructure; and most definitely when we act myopically towards the environment.
- Mirioron 7y agoI get what you're saying, but how sure are we that this spending actually ends up improving lives more than the cost it will have in the future? Politicians aren't always the most honest and with a complex system it's possible to obfuscate people enriching themselves at the expense of the taxpayer. How sure are we that this won't be abused at any point?
- qubex 7y agoIf you’re concerned about future politicians’ probity, surely you should be partially worried that they may choose to default and keep all of those gains for their constituents and stiff the bondholders? See? Thinking about the future is pernicious in that policy makers have both more and less latitude than one tends to assume.