Tags
Borrowing, Cafe Hayek, economics, Ethics, Hayek, Krugman, Philosophy, Public Debt, spending
“by DON BOUDREAUX on DECEMBER 30, 2011
in BUDGET ISSUES, DEBT AND DEFICITS, MYTHS AND FALLACIES, OTHER PEOPLE’S MONEY, SEEN AND UNSEEN
Dear Prof. Krugman,
On your blog (here, here, and here) you attempt to resurrect the notion that the burden of the public debt is not shifted onto future generations. Specifically, you argue (as did earlier Keynesian economists, most famously Abba Lerner) that whatever funds future citizens as taxpayers must pay to service the debt are funds that future citizens as beneficiaries of government programs receive. In your words, “talking about leaving a burden to our children is especially nonsensical; what we are leaving behind is promises that some of our children will pay money to other children.” Receipts equal payments, so collectively it’s a wash.
I searched your posts in vain for a reference to James Buchanan’s 1958 book…” Click This Link to Read On.
If you are interested in economics to a level that will shine some light on how the government intrusion into the free market system negatively affects the public debt, this is an article that you will find very interesting, perhaps, enough to push you on seeking a more expansive perspective. If so, you will find Cafe Hayek a great place to invest time in.
Dan Braganca said:
Maybe I’m just confused and you can help clear this up for me. It seems like Cafe Hayek is criticizing Krugman for something he’s not saying. Krugman doesn’t appear to be saying that debt doesn’t shift the burden on one group of Americans to another – he’s saying that America, as one nation, doesn’t face a ‘burden of pubic debt.’ In other words, one group of citizens may be richer or poorer because of borrowing, but America doesn’t get poorer by owing money to itself.