Contrary to a widespread view, the deficit does not impose a burden on future generations. There is no repayment burden because the government, unlike private individuals, can and normally does repay its maturing debts by borrowing again. (In the last resort, it can print money).As for the interest burden that is said to arise when the interest is paid by taxation rather than by fresh borrowing, it is merely a transfer payment. Income is transferred from taxpayers to bond-holders. In the case of the UK, most of these bond-holders are domestic. The transfer is therefore a redistribution rather than a loss of income.If, however, the public deficit is cut now, there will undoubtedly be a burden on both present and future generations. Income and profits will be lowered straight away; profits will fall, pension funds will be diminished, investment projects cancelled or postponed, schools not rebuilt - with the result that future generations will be worse off, having been deprived of assets they might otherwise have had.
As for the interest burden that is said to arise when the interest is paid by taxation rather than by fresh borrowing, it is merely a transfer payment. Income is transferred from taxpayers to bond-holders. In the case of the UK, most of these bond-holders are domestic. The transfer is therefore a redistribution rather than a loss of income.
If, however, the public deficit is cut now, there will undoubtedly be a burden on both present and future generations. Income and profits will be lowered straight away; profits will fall, pension funds will be diminished, investment projects cancelled or postponed, schools not rebuilt - with the result that future generations will be worse off, having been deprived of assets they might otherwise have had.
Future generations will curse us for cutting in a slump
Don't think so. Let's assume that a generation is 20 years, so the least for "generations" is 40 years. That takes us back to 1970. At that time, fast food was just being invented, jobs were still plentiful, US manufacturing still existed, etc. So, do you really hear the 18-20 year olds of today complaining about the loss of home-made food, etc. No, because they weren't around to experience the "good old days" and the bad guys know this lack of memory/knowledge will repeat itself time after time after ... Oh yeah, welcome to Iraq/Afghanistan you Viet Namers like myself. I thought after the "Viet Nam Experience" that it would never happen again and look where we are. In the end, might makes right. Nothing has changed since the caveman.
Will those kids have enough apprehension to curse anyone?
