We are a commune of inquiring, skeptical, politically centrist, capitalist, anglophile, traditionalist New England Yankee humans, humanoids, and animals with many interests beyond and above politics. Each of us has had a high-school education (or GED), but all had ADD so didn't pay attention very well, especially the dogs. Each one of us does "try my best to be just like I am," and none of us enjoys working for others, including for Maggie, from whom we receive neither a nickel nor a dime. Freedom from nags, cranks, government, do-gooders, control-freaks and idiots is all that we ask for.
Our Recent Essays Behind the Front Page
Friday, February 20. 2015
In our nation, we have taxation with representation. However, given the size of our current debt, and the length of financing being pushed out to 20 and 30 year bonds, much of the repayment will be provided by another generation.
This generation, of course, has no say in the introduction of debt, and this is a fairly common theme when the size of our debt is discussed. However, I've seen relatively few people discuss the political implications of forcing taxation without representation on these future generations.
Is there a moral issue related to deficit spending, over 20 to 30 years, since it is essentially taxation without representation? I think there can be a strong case made, though I've never seen it discussed. Has anyone else?
Display comments as (Linear | Threaded)
MARK LEVIN has certainly discussed this moral issue on his radio show many times, however I don't remember him focusing at length on the taxation without representation aspect of it.
Yes, the shifting of current financial burden onto future generations is a fairly common theme in economics. I've heard Levin discuss this, as well as many other economists.
Yet the moral and philosophical support for our right to force future generations to pay taxes for what we want now is a questionable one. They can't vote! So what right do we have to make them pay without their consent?
I suppose a Progressive/Liberal might suggest "we're spending money on goods and services which assure the future benefit of citizens, and that is justification enough."
I've never heard this, I'm just thinking out of the box a bit (Progressives never worry much about the real moral justification of anything or they'd be more supportive of market based solutions).
I studied Political Science while in college, and during a period of massive deficit spending under Reagan, yet not one single discussion was ever raised, in 4 years, about the legal right to force our current costs onto future generations without their consent.
Seen it a few place mainly when the money wasn't spent the way the kvetchers wanted and in elections when the incumbents go crazy using warrants and bonds instead of saying no and trying to stay in budget.
Also seen it defended by all sides as an investment in the future, e.g bridges, sewers, industrial parks, national guard armories, etc. Certain extent it is, also the matter of jobs, bond agent fees, bond attorney fees, appraiser fees, lots of cash to float around.
I'm in Canada but, as we are a parliamentary democracy, "taxation with representation" is an underlying principle here to.
You know what though? I have never, ever seen a mass demonstration by the younger generation in which they carried signs proclaiming CUT GOVERNMENT SPENDING! or REDUCE THE DEFICIT NOW!
Judging from the sorts of political issues this generation routinely espouses (More money for this! More money for that!), they are no less spendthrift than any of their elders.
I'm not so sure they are as spendthrift as they are unaware of its impact on their future.
If somebody pointed out to them, throughout grade and middle school, that we were spending their money today, I wonder how they would react when they reach voting and protesting age?
The problem, of course, is as Mr. Moffett above points out, it would be defended by the extremely Progressive/Liberal teachers as "an investment in your future".
I am not entirely sure how most of this spending is an investment in anyone's future, let alone our kids and grandkids. Some of it can be passed off as such, like 'roads' or 'security' (if we're not here tomorrow, you may not be either - an entirely spurious argument).
But it's still a question. Do we have a right to spend the money of a generation that has no vote?
The problem is "free stuff" and the influence to be had by those who give away "free stuff". This is how your irresponsible children live; spend all their money and use credit to buy what they want. This is what causes poverty in a country where anyone can succeed. It is in our genes, a part of human nature to want "free stuff" and to spend what you do not have. The solution to all this is exactly like the solution to any addiction, but don't expect the addicts to willingly embrace the tough choices.
Our founders were well aware of the dangers of debt. Well, some of them were.
There are, of course, some benefits to debt - though one has to weigh many factors in the balance and elected officials, driven as they are by give-aways to voters, are no longer the philosophical types which founded our nation.
I'm not asking whether it will ever end. I doubt it will, simply because of the perverted structure of our voting system - perverted by the politicians themselves.
I'm just wondering if a philosophical case can be made which academics can latch on to. It's kind've a moot point since most academics are leftist to begin with and won't worry about the theoretical precepts of democracy or the factual underpinnings of a healthy economy.
re "Is there a moral issue related to deficit spending?"
It depends on your morals.
We don't all value the same things.
What we value, and what is morally correct, are rarely intertwined.
I would have to say that if you found anyone in the US who felt it was morally correct to have taxation without representation, they would are probably sadly undereducated.
As a result, I'll let my question stand. It may be a question of values in, say, the Middle East or Asia, which have vastly different traditions of governance. But I'm not talking about those nations.
In the US, it certainly is a moral question. Do I have a right to impose a debt of my own making on my children without their consent?
But look at the other side of the coin...should there be representation without taxation? If you are on the freebe list should you actually be represented? Should you need a 1040 and W2 in hand to vote?
Well, in terms of passing tax legislation, probably not.
But given these legislators do many other things, I'd think it's fair to say everyone should have some level of representation. I think stories like Gideon's Trumpet make a strong case for everyone having rights protected, and that's really the job of our representatives.
The future has the option to default on debts incurred by the past. Thus, the taxation does come with representation, a choice to continue the scheme forward.
Rome, when it needed to fill the govt. coffers, just conquered another country and brought home the loot. Today, we just loot the future by borrowing. Riches today, Poverty tomorrow.
Etymologically, economics is the study of household finance, so it is reasonable to consider the moral aspect of the question by positing our future taxpayer as an individual householder. If he inherits a house, which he enjoys and occupies, from a previous generation, and that house is encumbered by a mortgage, he must accept the obligation to pay off the mortgage.
If he inherits some sum of money, a patrimony from his physician father who generated that money from the practice of medicine, and the father's student loans which financed the degree are not fully paid off, I think there exists a clear obligation to pay off the father's student loan.
Now suppose he is presented by his grandfather's creditors with an enormous bill, for Grandad's lifetime of riotous living, whiskey, and cigars, activities which our householder neither approved nor benefitted from. Imagine further that agreeing to pay this hideous sum will make it impossible to feed, clothe, and educate his own offspring. Clearly he must repudiate the debt. It's the only moral option.
Some debts from the past you are obliged to pay. Some you are obliged not to pay.
Most federal spending is whiskey and cigars. Ergo, the debt will never be repaid.
I agree in principle.
Etymologically you might be correct, but historically incorrect. The first acknowledged 'economist' is Adam Smith. He and those who followed in his footsteps were Moral Philosophers, seeking to explain and justify human behavior, particularly on an individual level. Smith's great insight, among many others, was that the cumulative of individual acts is typically not what one would expect and therefore guidance of the cumulative best left at the individual's choice.
As for debt, debt which is inherited is not exactly as you explained. There standard order of debt upon death is state, secured creditor, unsecured creditor. However, once the estate is tapped out, inheritors are not obligated to assume debt. If the inheritors wish to purchase goods otherwise held by creditors, such as a house, they can choose to assume that debt.
Such a choice is not provided to our children. Even if they wished to repudiate it, this would require electing a sufficient number of Senators, Representatives, and a President unwilling to veto such a move. Possible, but unlikely.
Or they can choose to not pay taxes and risk being jailed.
Repudiation is the only option, but not a very likely one.
Repudiation is still not representation.
In the tradition of Moral Philosophy, since public debt accrues to the later generation and its benefit to ours, do we have that right to impose that cost without consent?
The question strikes me as a companion to Spooner. The mechanism by which costs are imposed has no authority. The future did not ratify the Consitution, nor was it consented on any aspect of the creation of the world it inherited.
So I can't get past my reading that the debt and any taxation to pay it is a choice the future makes. They have to decide if they want to keep the houses and roads and dams and institutions the past has built, or if they prefer to let them go back to the creditors.
And who in the future can confirm and validate the claims of creditors? Corporations exist at the whim of the state. There perpetual nature is a legal mirage. That a document says a debt shall be owed for 99 years to an abstract entity while the entire human cadre behind will have died off is as ludicrous as holding that Article I morally binds the future with both the ability and obligation to lay and collect taxes upon itself.
Do not confuse what is practically possible with what is a moral right. Revolutions are the future refusing to consent to the instructions of the past. Each generation decides its own moral philosophy.
My thanks to Bulldog and foxmarks for their consideration of my little mental exercise, and their learned replies. All analogies are perilous, and discussion by analogy is unlikely to be definitive. I was trying to understand how a debt incurred by someone in the past might impose a moral obligation on someone in the future.
For fun, let's assume the debts of the deceased are not legally enforceable. (We are departing very far from the national debt in this regard. And also parenthetically, why is the State privileged to be the first creditor of the deceased in line? Shouldn't the State be last, as best able to sustain the injury if not repaid?) I still think our future heir might feel a moral obligation to pay off the mortgage on the inherited house, and the father's student loan.
But he won't sacrifice what's left of his patrimony, and impoverish his children, to pay off the debts of some reprobate ancestor.
Perhaps debt incurred to finance capital spending, e.g. construction of a road or school, which is partly of benefit to a future generation, can also be partly shouldered by that generation. I guess it is a form of taxation without representation. But the present generation makes a lot of decisions for the next generation, and it is impossible to see how it could be otherwise. Our names, immunizations, education, religion, whether we are bottle or breast-fed, are all completely or substantially determined by our parents before we are adults.
Is the national debt just another of those decisions we make for future generations?
The difference may be that our parents are, as best they can, acting in our interests. A government making wise capital investments for the future may be doing similarly. So the expenses incurred are really our expenses, because the efforts are designed to redound to our benefit. So morally we should help pay for them.
But, what if the government is not acting in the interests of the future generation, but spending the money on vote-buying largess to the idle, crony capitalist payoffs, Obamaphones for illegal aliens, and complicated healthcare schemes that enrich insurance companies but don't improve healthcare? Can anyone construct a moral argument that future generations are morally bound to pay for something they neither voted for nor benefitted from? I sure can't.
If you build me a school, a library, or even a good highway interchange, in some fashion I am in your debt. But if you run up the national debt buying hamburgers for J. Wellington Wimpy, you had better hope he pays you on Tuesday for that hamburger today. Because I won't feel obliged to.
I addressed the concept of the state as a wise provider of future benefit in my response above (1.1).
It's the essential basis of the Progressive concept supporting the "Nanny State" and one which I reject out of hand.
It may be true that you enjoy the library, or road, or other public good which the taxpayers of the past provided by taking out a loan (remember, all public goods which were provided also carry maintenance costs, too - so future generations aren't just picking up the tab on building these things, but also maintaining them). But maybe other people are not as enamored of these public goods?
I'll use the library and the post office as examples. At one time the Post Office was a Cabinet level position! Why? Nobody could imagine private enterprise providing such a thing. Yet by the late 1970's, FedEx had started. By the late 80's the Post Office was going broke because of FedEx, DHL, and a host of other private shipping companies. Today, it's even more broke because of private enterprise which has create email and (shocking!) comment sections on blogs (we no longer have to use handwritten and hand delivered notes to have this discussion)!
Libraries are a similar story as they struggle to survive in today's world. There is a different twist here, though. Many libraries, including my own, were provided by private enterprise (we have a Carnegie Library). In addition, those that weren't had much shorter payments on their loans and were otherwise supported organically. However, for the sake of discussion let's say they weren't. Let's say my library was created 10 years ago with a 30 year bond I voted for. My sons now have to pick up that bond payment, even as the library begins to suffer from disuse (thankfully, this is not the case in my town, though it is true in many others).
Do they have the option to stop paying that bond? Do they have the option to vote and say "hey, we didn't ask for this outdated thing you call a library, so why are we picking up the tab? Sure, you may have been looking out for our best interests, but you are not visionary and you are not all-knowing. Clearly this was a mistake, and we refuse to pay."
Nope. They don't really have that option, unless they elect representatives who push forward such an unlikely agenda.
Should we shut down the Post Office? Absolutely. It's dead weight today. There are other, better, ways to get information transported. But political inertia will continue to saddle us with billion dollar bets on its survival which we will lovingly pass along to our progeny.
Back to your larger point, though. The question of whether the debt is the government "looking out for us" is a loaded question. It may seem that way. Immunizations are a net good thing, so it may be one place where the survival of the species outweighs the question of whether going into debt for it is worthy of representation (I did point out in my initial query that there are some instances where it makes sense - I'd say WWII was an example of another). But not all things the government does is in our best interest, even if it seems like it is. I listed two - post offices and libraries may have seemed like they were, but it's hard to justify them now (remember, many libraries were privately supported originally, so they are a special case) in many communities.
Organic, private enterprises can provide these things much more effectively and efficiently and without imposing future costs on our children - making questions like mine irrelevant.
As a side note, roads are not a public good. Most roads developed organically, without government, as did canals and other modes of transport. It's hard to imagine a world where businesses exist and roads do not. I'm fairly certain roads would still be around if the government stopped paying for them. In fact, the first highways were created with the support and payment from auto manufacturers. When they realized they could pass the cost off to the taxpayer, and at the same time increase the likelihood of the duped taxpayer buying one of their cars (which meant their spending less of their profits on roads), they could see massive profits. Quite a scam, huh? Not bad, but now so many people believe that our beneficent government 'created' these roads, when the truth is quite the otherwise.
The problem with a claim on creditors is that, theoretically, defaulting on debt is always the better option (oddly, even if you believe Krugman's insane concept of "we owe it to ourselves, so it's not a real debt", it's even more logical to default). We get to keep the roads, dams, institutions and....everything if we default. Because who is going to impose a claim on a road or a dam if the government defaults?
These loans are, essentially, unsecured.
While it's true that the future did not consent or ratify the Constitution (indeed, I never formally agreed to abide by it except by my continued consent to living here as the best of all other options), this really doesn't play a role in the discussion I've presented.
Your final sentence does, somewhat, play a role. Each generation assumes it has its own particular philosophy which is more beneficial. This is, indeed, how revolutions are formed. However, very few revolutions live up to their hype, and very few survive in as close to its original form as our nation's.
I'll add this - corporations actually do not exist at the whim of the state. They kind've, sort've do, because we've crafted a legal framework of contracts and obligations which the government manages but which are primarily managed in the courts. And while it's true the state can, at any moment, shut down a corporation for any reason it sees fit, the reality is this happens infrequently and probably should almost never happen anyway. Corporations were originally designed, in the US, as a preferred option to government capitalization of large projects. They were seen as removing risk from taxpayers and shifting that risk to private investors who stood to gain, or lose, based on their ingenuity, thrift, and management.
Corporations are not perpetual, and it's false to assume this. In fact, one of the longest surviving corporations today is General Electric. Most others have collapsed and died, or been purchased or otherwise subsumed by newer, more dynamic ones. It's not a legal mirage at all. The ability to exist in perpetuity is based on the ability of corporate management to maintain a level of success in achieving its aims of profitability (or in the state's otherwise lack of interest in shutting them down entirely or nationalizing).
Therefore, a 99 year bond at a corporation is actually far more interesting and meaningful to my child who may inherit from me than Article 1 of the Constitution because it may provide income. This isn't to say Article 1 is meaningless - I'm merely pointing out there is no mirage to money and income - it's a tangible thing. Rights, on the other hand, while important and meaningful to many of us, are purely intangible and therefore much more malleable to the whims of the state.
The only option for the future to exercise 'representation' is whether not debt can, or should, be repudiated. But it is a meaningful question about representation. We may not ask future generations if they wish to abide by the Constitution (as I pointed out, I was never asked), but it is logical and rational to do so unless you see another nation which suits you better.
Debt, on the other hand, is far more tangible and that is why we sought, as a nation, to have representation before we were taxed to cover an unwanted debt of the state.
The sad fact is that any argument that some portion of the national debt can morally be passed onto future generations is fatally weak, because the portion at issue is small. Two-thirds of the federal budget for 2013 went for entitlements, about 18% for defense, and miscellaneous for the rest. In a national crisis threatening survival, like WWII, I can see saddling future generations with debt for defense. It's impossible to say we are using defense funds to battle an existential threat today. There may be an existential threat, but we aren't addressing it. So we can't expect our progeny to finance present defense expenditure.
Add defense to entitlements, and close to 90% of the budget is going for Wimpy's hamburgers, and Grandpa's whiskey and cigars. It's not worth arguing that some tiny fraction of the debt could or should be passed on to the next generation, and I am not sure the case can be made even for that, anyway.
Owing a debt to the past is a sentiment which is human and almost self-evident. But when the past sticks you with the tab, the sense of filial obligation is sensibly diminished.
Well, yes, and add in the likely disposal of the Post Office and all its deficits, the eventual bankruptcy of SocSec, and the likelyhood of Obamacare failing....and you've got a perfect storm of debt brewing.
But that's exactly why I asked the question. What, exactly, does the next generation get with all this debt and why don't they get to say "hey, we don't want it"?
Or will they, as foxmarks suggests, revolt and repudiate?
My guess is that human nature is strong and acceptance of "that's the way it's always been done" will prevail (see the recent rollover of the new leaders of Greece - Greece WILL default eventually...it's a question of when will this generation realize their predecessors screwed them and the current leaders will turn them into Venezuela).
Ultimately, you can't poll the future and say "hey, do you want us to take on debt for all this stuff?" But that's the moral reasoning behind exactly why we shouldn't - they have no say in how we spend their money.
It is important to be clear about the various and several "we"s that have been introduced.
Which "we" holds the bonds on a dam? Is that a different "we" than those who benefit from the continued existence of that dam? And that's part of why I brought up corporations. The state is another "we" that must be considered, a particular corporate form that some "we" empowered with the ability to tax yet a different "we".
I disagree that default is always the better option. It really depends on the terms of the agreement, the desires of the parties and the condition of the securing assets. If some incorporated collective, either a private corporation or a government, believes that it can eke benefit from operating the dam as it is, paying both opex and debt, why would management take the risk of repudiation?
The question was about taxation. But is a toll to cross the top of the dam one of those taxes which the future should not be coerced to pay? Or why should the future be coerced to pay for power the dam generates (beyond operating expenses)?
For all those things not set immediately on fire by the present public (whatever small percentage of gov't action that might be), if the future cannot be held to pay, how can they have any claim to benefit?
Waving the fear of Progressivism no longer works on me. Either one is a classical anarchist, or one is merely drawing lines for personal convenience. Corporations, both private and in the form of governments, can provide works of enduring good. The beef, as I see it, is not over politics itself, but against the corrupt nature of men.
The moral philosophers of each age establish their rules. Or their interpretations. Whether it is right to bind the future into debt depends much on how one sees God. That any man or all men can be born into any obligation at all is a fundamental moral question. Who is truly born free?
i only used 'we' twice in my response, so I'm pretty clear about who the 'we' is in my response. Well 3 times, though the reference in the Krugman part was still the same as the other two - but facetious in nature.
I deliberately avoided multiple uses of it so it was clear who I was referring to. The only 'we' I referred to is the current societal arrangement and its predecessors.
I'll start by saying the state is not "we" in any of my comments. The state is the anti-"we".
Ultimately, I stated that default by future generations is the better option because they get the 'benefit' of all that stuff without having to pay back. Default carries costs, but these may be considerably less than carrying forward.
The terms of government bonds are such that if a future generation chooses to elect those who repudiate payment, the decision to continue operating to eke out a profit has nothing to do with repudiation. Let's say voters choose to repudiate. Management at the dam, let's say a utility, will continue to operate because they can eke out a profit. So default 'benefits' taxpayers - they still get the power from the dam and they don't pay the taxes on it.
As for the toll - that's a use tax. You can choose to use it and pay or choose to find another path to avoid it. Like a price on any good, you have options in real time. So the future doesn't play a role here.
I'm not sure about your question about claim to benefit if they can't be held to pay. There are sunk costs in roads and buildings. The future 'benefits' even if they choose to repudiate the debt. HOWEVER, much of the debt is being spent on 'things' the future will never see (income redistribution, health benefits, etc.) and therefore they have no claim on it anyway - so the willingness to default should be high.
You point to the corrupt nature of man - and that is, indeed, precisely why I asked the question. This is not waving a fear of Progressivism. This is asking a question of morality of certain parts of the democratic process which involve budget, and as a result, it is intrinsically tied to the corrupt nature of man.
We fought for representation because our previous government had become corrupt. We fought that corruption and formed an improved method of governance to reduce this corruption via representation. But man is good at finding ways of overcoming barriers to corruption....and create newer forms. Alexis de Tocqueville was quite prescient when he stated that our republic would survive until those representatives learned they could bribe the people with their own money.
Except now they bribe the people with their children's money - taxation without representation.
The confusion of "we"s happens when you, me, and Hrefn all reference groups of uncertain membership.
The original question seems to conflate a financial concept of debt with a moral concept of obligation. Or perhaps that was my aim, to highlight that whatever legalisms are in force in an era, does that change the moral landscape?
Are there sunk costs in moral calculations? Am I born free and without obligation because my parents and forebears had to develop society and civilization (and lasting goods like dams) whether or not I existed?
I'm not sure I can easily agree that representation was a method to counter the fallen nature of men. I would more easily say that dividing power between factions was the signal innovation of the Founders. In my spin on the world of modern politics, it is not so much the bribery that is a problem. Bribery is to be expected. But the concentration of money power in so few hands, enabling such massive and effective bribery, makes pleas about representation seem insignificant.
We do not have representation today. How is my vote any more valuable or effective than one cast generations in the future?
I guess, then, that I focus on the debt/obligation aspect of "taxation without representation". Is the debt valid? If it is valid, how the future chooses to pay it, the representation/political aspect, is the future's problem.
Which is why I rarely used the "we" except where it was pretty evident who the "we" was.
Debt does carry a moral obligation, on the part of someone. Which is why I asked that question. Public debt implies the debt repayment is obliged by the taxpayers, or 'all of us, including those who follow whether they asked for it or not'.
The moral landscape never changes. What changes is what version of morality the next generation chooses to impose - but ultimately morality tends to be similar and unchanging over time within cultures. There are slight tweaks - an eye for an eye may become turn the other cheek. But obligations between humans are what they are, even if a next generation grows up and says "this is not so, simply because we don't like it" - that we've seen before, in Bolshevik Russia. Clearly that kind of thing doesn't work very well.
We've seen it in Mao's China, as well. Apparently even that model has faded and shifted.
Whether you agree that representation was a method to counter the fallen nature of man (which is, essentially what Madison argued in Federalist #51), you are correct that dividing power was a huge innovation. You're also correct to say bribery is to be expected. Yet I fail to see the concentration of money power in the "few hands" to which you refer? The wealthy? You mean the Rockefellers? Or the Gates? Or the Buffetts? Or is it Soros or Koch? Or are you referring to the politicians who take their scrapings from those plates?
In any case, those "few hands" are many more, and far more divergent in interest, than what we were dealing with in 1775. And far greater than the power concentrations in China or Soviet (and modern) Russia.
Yes, money concentration can be worrisome in some cultures. It depends on the system in place. Our system is designed to (some degree, anyway) counterbalance these wants and desires.
Does that work? I'm not asking that question nor do I think that's the imperative here. I have my own views regarding that (which is no - it doesn't work, but it works better than most others I've seen, if political power is what drives you and it doesn't drive me, I'm more concerned about economic and political freedom).
Which, again, brings me back to my question. There is a moral obligation associated with all debt. If I take out a loan, I am morally obligated to pay it back. This is why often, in economics, we discuss the concept of 'moral hazard'.
Shift the "I" to "the public taxpayers, as represented by Congress" and the obligation is still the same, but with a very different twist. Only some public taxpayers agreed to take out the loan (I certainly don't remember voting for it, and when I've had the opportunity I've opposed bond issues at a state/local level). So not only are our children likely to be handed the debt and be obliged to pay it, but so are many others like me who opposed it - but at least we were "represented". Our children have no such 'power' (frankly, few people have any power in any system, but we do like to fool ourselves into believing we do).
I accidentally used an absolute when I stated "The moral landscape never changes." It does change, and I even gave examples of it changing.
My point was that the moral landscape rarely changes significantly. It is different between cultures (debt is handled very differently in Islam, and frankly I like the concepts they employ for managing debt, since all interest is considered 'usury').
That said, the morality which we employ today is the same as it was 500 years ago. The fact that 500 years ago people weren't as advanced and thought witches were real and should be burned doesn't mean they operated under a different morality. They simply had a different understanding of the world which altered their perception of reality (which is why I tend to say perception is not reality, contrary to what many people think).
Burning a witch was no more moral then than it is today. However, it's understandable why they may have done it, and I can't hold them to the same, more enlightened, viewpoint that I have today. On the other hand, the horrors the Nazis or the Bolsheviks employed are immoral in any society, regardless of whether their own society made claims otherwise. Furthermore, doing what they did is not understandable in the same way that burning witches 500 years ago may have been.
The same is true with financial obligations. It is immoral for me to make a promise to repay a loan and then renege on that promise (if I have the capability of paying, that is). It is immoral for me to take out a loan if I know that there is no way I can repay that loan and therefore renege on it later, even if the lender is willing to give me the money (think the housing bubble).
Public debt can always be repaid with monetization - but that is still taxation without representation, as it creates inflationary pressures and erodes confidence in a currency. As a result, that is also an immoral approach to funding (Mississippi Bubble, South Seas Bubble).
“the public taxpayers, as represented by Congress" is one of those groups of "we" with uncertain membership.
No person is obligated to be part of that collective, any more than he is obligated to pay the toll to cross the top of an ancient dam. Going Galt is only one viable alternative.
For all we know, the future may develop an innovation in technology that produces so much wealth that extinguishing the debts of the past is trivial. Or the future may choose to fund government and pay debt by other means, perhaps by increased tariffs or more comprehensive user fees or the rent/sale of vast public assets.
The more we go back-and-forth, the less I can believe the future need be our concern. If you're happy with the way wealth is controlled today, that current allocations were arrived at by moral and just operations, why such woe for the future? We are merely operating with the mechanisms created for us by the past, and conveying them forward as temporary stewards. Anxiety about how the future will allocate their legacy is a hair shirt I choose not to wear.
What I suspect you are really getting at is the waste, fraud and abuse by current governments in current times. Wailing about "the children" is a form of alarm about what is happening now. If we operated a political society with a sustainable zero-footprint financial system (to blend in some enviro ideals), there could be much less misallocation, corruption and coercion in the present period. It is the manufacture of debt which enables most of the outcomes you and I dislike.
But then, you and I may still disagree on the sinister nature of debt. It is another fearful master, and those few hands who control it are the ones I call out.
I think you're misunderstanding much of what I've written.
A) I'm not happy with the way wealth is controlled today. Which is why I raised the question. It poses a moral question to those who ARE happy with the way it's controlled, and I've laid out one (of many) cases why they should be unhappy.
B)I'm not getting into the waste, though that plays a role in what causes this moral complication.
C)The future may develop so much wealth that this becomes immaterial. I won't hold my breath. We've been told that story before. In case you missed it, electricity was the last big thing that was going to make everyone so wealthy that these problems would go away. That's just not the nature of economies and distribution. So while it's a possibility, it's hardly something I'm going to hang a hat on and say "there's little to worry about."
D) We agree on the sinister nature of debt. But debt, in one form or another, is essential for economic growth. We conserve today to have more tomorrow. We save so that others who are ingenious can help provide more, which allows us to grow our savings. Debt on its own is not sinister. Unsecured debt, or public debt, among others, can be.
We're not as far apart as you seem to think, unless I've misunderstood what you've written and these 4 points you've taken a different view on.
I merely posited the question because, in our current standard, there is a moral question which has not be asked or answered by those who claim it's our right to do what we are doing. All rights carry responsibilities. We don't have to live up to our responsibilities, but if we don't we've then tread into the question of moral obligation....which is where I've tried to keep this discussion.
No, I don't think we are far apart, particularly on the added point about unsecured debt.
The failure of the promise of C) relates to the problems of A). That is a tangent, and a long one, that economic and financial models cannot envision abundance. They perpetuate scarcity. I can blather about that if I ever find the time to restart my blog. :-)
There is a moral obligation over debt and other negative legacies, but I'm not seeing it as a "taxation without representation" problem. I'm with you on the premise, but do not make the same conclusions.
Well, it's not that economic and financial models can't envision abundance. They can. The problem of abundance, however, is moral hazard.
Water was abundant, nobody paid for it. Sometimes people got sick, sometimes they didn't so they developed ways to get water more effectively and safely. This imposed limitations on it.
In addition, when it was "free", it was abused. Think of things like the Collect Pond in mid-Manhattan, later 5 Points.
Water was abundant then, so the tanneries polluted the Collect Pond.
Air is "free". Except if you're a scuba diver, then you pay for it.
Yet on the surface, some people would say the fact that it's "free" means the incentive to pollute it is higher (there are arguments against this, but just making the point).
Economics certainly can envision abundance, and it can model the potential for hazard which accompanies it, as well. Low interest rates? Abundant money? Moral Hazard in lending....boom then bust.
The basis for economic modeling is that we have unlimited wants but limited resources. The goal is how to best achieve a Pareto Optimality of aligning resources to wants/needs.
If abundance is, indeed, the future, then economics as a field of study is unneeded for the most part.
But that seems relatively far-fetched. Every time anyone has said that society has reached a position of 'abundance', the wants and needs of society have then extended.
Yeah, I need to better explain my mental shorthand. I switch between calling it "abundance" and "post-scarcity". Physical resources are always finite. But within an economy, and eventually a world, there will be so much wealth and know-how that people would/should have to labor very little to live well.
I am no longer satisfied with the capitalist explanations, and was never satisfied with the socialist explanations. What you wrote about extending wants and needs is important.
Like I say, it would be a long tangent. And I haven't even worked out all my beefs yet. But I look at the condition of the ordinary laborer in USA and cannot help but conclude he got screwed after a century of co-creating vast prosperity. There are factors not considered in the usual models. Land titles and money-debt are my two primary suspects. I can longer simplistically just blame it all on "government".
Anyway, thanks for the exchange.