So if the government enacted a Free Candy For Everybody policy, and over ten years built up a trillion dollars in debt buying candy from overseas and distributing it to everybody of voting age... When people come of age where they can pay taxes that go to the debt that was used to buy the candy but never got any of the candy themselves, it's exactly the same to them as if the debt had never been run up?It really is truly amazing how many of my outraged commenters cannot read and understand simple declarative sentences in the English language, and how economic ignoramuses such as Alonzo Fyfe and my anonymous commenter appear to lack either the desire or ability to think beyond their naive, faith-based delusions.
Thank goodness, I thought they'd either have to pay higher taxes or have fewer government services to make up the difference, at least on the debt's interest if they didn't care about paying down the principal.
First of all, a trillion dollars is chump change, less than a month's GDP. It's like Dr. Evil demanding One Million Dollars. The Department of Defense has half a trillion in couch cushions at the Pentagon. If you're going to create absurd hypotheticals, at least make them scary.
It is of course possible to use deficit spending unwisely. In much the same sense, it is possible to drive a car into a crowd of pedestrians, but by itself that is not an argument that cars are inherently and universally bad, which is the argument that Fyfe makes regarding deficit spending. In the case Anonymous presents above, what is unwise is consuming a trillion dollars worth of candy; it would be just as unwise no matter how we chose to account for its consumption.
Although it is probably ludicrous to believe that there is any actual desire for a trillion more dollars worth of candy — I suspect that if the world made that much more candy, it would simply rot in warehouses and cupboards — if there were that much demand, why would we purchase it all from overseas? Are Americans suddenly unable to build factories and produce candy? It really is funny how in their hypotheticals, libtards always assume that their vaunted American Free Enterprise system suddenly turns to jelly in the face of the most trivial government action.
If there really were a trillion dollars worth of unmet desire for candy, turning that desire into demand by deficit spending would cause capitalists to build a lot of factories and hire a lot of workers to produce a metric assload of candy. Which would cause exactly what deficit spending is supposed to: stimulate additional production to move short-run aggregate supply equilibrium to the long-run aggregate supply equilibrium with aggregate demand.
Even if there were a trillion dollars of unmet desire for candy, and it turned out that American capitalists were unwilling or unable to meet that demand, why would we expect foreigners to supply it? Foreigners lack a good mechanism for collecting debt coercively. If our children believed the money had been spent unwisely, and it were not in their interest to repay their debt, it would be within their ability to repudiate the debt. Knowing this, foreigners would loan us a trillion dollars worth of candy only if they believed in was in our children's interests to pay with a trillion dollars worth of something else in the future. And if it were in our children's interests to pay the debt, how are we acting immorally by incurring it.
Macroeconomics is not that hard. No harder than evolution. Seriously, people, take Principles of Macroeconomics at your local community college, and at least try to think these issues through logically.