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Interesting definition of government debt, but those “paying back” the debt in future taxes are very unlikely to have any connection to those who incurred the c
by strawberryfie 3y ago
Interesting definition of government debt, but those “paying back” the debt in future taxes are very unlikely to have any connection to those who incurred the costs to start with.
- neilwilson 3y agoBut they will have inherited the asset side of the debt from grandad won’t they. That’s the connection. Debt is really saving and when people spend those savings it eliminates the debt.
- strawberryfie 3y agoThat assumes Grandad didn’t blow the money on dumb and/or short lived stuff.
- neilwilson 3y agoIf he did then additional tax would occur from his spending and that induced downstream in the spending chain which would eliminate the debt that was previously his savings. Debt and savings are two sides of the same coin. If the savings disappear via spending and taxing then so does the debt. Remember money doesn’t stop at its first use. Spending and taxing work like a stone skipping across a pond. Saving and debt is like videoing that skip and pressing pause half way through. Once you unpause by spending the savings the stone skip continues. What you’ll note is that the stone always sinks - taxation will always match spending in the long run.
- strawberryfie 3y agoI don’t agree that spending money always results in valuable, transferable assets. It isn’t hard to think up counter-examples: under-utilised infrastructure projects, projects that become a maintenance liability, many social and health programs, etc.