If the government borrows $1, and the effect of that borrowing is to reduce my tax burden, the $1-plus-interest will not necessarily be repaid by me. I might not even be alive by the time it’s paid off!
This is a knife that cuts both ways, of course: when some of the money I pay in taxes goes to paying interest on the national debt, that includes interest on debt incurred before I was a taxpayer, or even before I was born. (The US government hasn’t been completely debt-free since 1835.)
And when the government borrows money instead of raising my taxes, it is not necessarily doing so because I asked it to, or even because the programs it is borrowing for are things I want it to spend money on. In this respect, it is no different than a corporation that issues bonds to pay for some expense, instead of raising prices to customers or cutting expenses elsewhere.
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Date: 2021-09-26 03:06 pm (UTC)If the government borrows $1, and the effect of that borrowing is to reduce my tax burden, the $1-plus-interest will not necessarily be repaid by me. I might not even be alive by the time it’s paid off!
This is a knife that cuts both ways, of course: when some of the money I pay in taxes goes to paying interest on the national debt, that includes interest on debt incurred before I was a taxpayer, or even before I was born. (The US government hasn’t been completely debt-free since 1835.)
And when the government borrows money instead of raising my taxes, it is not necessarily doing so because I asked it to, or even because the programs it is borrowing for are things I want it to spend money on. In this respect, it is no different than a corporation that issues bonds to pay for some expense, instead of raising prices to customers or cutting expenses elsewhere.