Running Up the National Debt Must Burden Future Generations, Essay Example

The government has various options through which it can source for funds to provide public goods as well as catering for its expenditure. One of these sources is through borrowing. By borrowing, the government spends more that can afford thus ends up with a debt. Such a debt, acquired at a cost, has to be repaid later (Cavanaugh, 17).

However, since the borrowings are sources from the citizens, they stand to gain from the debt in two ways. First, the interest accruing from the best provides a good return to their investments. Lending to the government is one the most secure form of investment since there is no risk of default. Both the interest and principal will revert to the lenders later thus leaving the lender richer.

Secondly, the government is able to afford expenditure for public in goods. Without the borrowings, provision of certain public goods would be out of the government’s capacity. Therefore, instead of postponing expenditure, borrowing enables the government to afford these goods and pay for them later. According to Cavanaugh (p 17), the citizens will enjoy the services provided by these goods while benefiting from the lending to the government.

However, the benefits will not accrue to all citizens alike since not all citizens are capable of lending to the government. As a result, increased taxes to repay the debt will be detrimental to those citizens who are not lenders. Similarly, if the government borrowed to fund consumption, the future generations will repay a debt whose benefits are non-existent. Thus for government borrowings to be beneficial to the future generations, the government has to source the funds from a wide base of citizens as well as invest the money wisely so as to benefit both the current and future generations.

Conclusion

Borrowing, as a source of funds is a viable way of achieving capability in availing required goods and services. The responsibility of the government is to provide the required facilities for economic growth and development. Sourcing for funds from the public is a viable option both for the government and for the generations only if the funds are channeled towards expenditures that have long-term productivity.

Work Cited

Cavanaugh, Francis X. “The Truth about the National Debt: Five Myths and One Reality”, USA: Harvard Business Press, 1996, p17.