3 Answers | Add Yours
Previous questions that you have asked have been based on a textbook by William McEachern. I will assume that this question is based on that same text and I will therefore base my answer on what McEachern says.
Many people say that our debt will become a burden to our children and grandchildren. This is because we are borrowing money in the present and promising that it will be paid back in the future. Looking far enough into the future, many of us will no longer be working and paying taxes. Instead, it will be our children and grandchildren who are paying the taxes that will be used to pay off the debt. In this sense, we are putting a burden on our descendants.
McEachern also points out, however, that it is largely our descendants who will benefit from the debt. Much of the national debt is owed to Americans. They hold the debt in the form of bonds. McEachern’s argument is that our descendants will also get the money when the bonds mature. Thus, even though they are paying for the debt, they are also getting the benefits of that debt.
Though McEachern does not say this, we can also point out that future generations can benefit from the debt if the money borrowed is used wisely. For example, if we use the money to create good infrastructure or to improve our educational system, the money will help people long into the future. Thus, we can also say that we are borrowing for things that will help our descendants. (Of course, this is only true if we use the money wisely.)
Thus, McEachern would argue that we are passing the burden of debt to future generations, but he would also say that we are passing the benefits of that debt to them as well.
When a country (or any entity) spends more money that it takes in, debt is created. The United States is in debt. The U. S. government is borrowing money to cover the shortfall between the amount of money it collects and the amount of money it spends, and interest must be paid on that borrowed money. Only two meaningful things can happen to eradicate that debt: bring in more money and/or spend less. It seems to be one of the most difficult tasks in the country to get the Federal government to spend less, and the cuts which have been implemented are not significant enough to make too much difference. That means the debt is not going away anytime in the very near future.
You tagged this question in the social science area, so I assume you are looking for more of a philosophical and practical discussion rather than an elaborate economic formula or explanation. It only seems fair that the group of people (the generation) who created and benefited from the debt should be responsible for paying it off. If the debt can be reduced or eliminated in the next ten or twenty years, perhaps, that will have happened and all will be well.
If, however, those who created and benefited from the debt either fail to pay down the current debt or create more debt, it is the next generation that will have to unfairly suffer the consequences and bear the financial burden of repayment. That means that "our children and grandchildren" will have to work longer (and perhaps harder) to meet their own needs because their tax burden is so heavy; this, in turn, leads to a multitude of other problems such as less time for families to spend together and less discretionary income to spend (so not as many private lessons or elaborate family vacations).
In short, it is not fair that those who did not make the mess should have to clean it up, and that is what will happen, it seems, if something does not change in the next decade or two.
In simple terms, yes. Most of the national debt that we are accruing will eventually become a burden of future generations. But this isn't a new development. We borrow money in the present, and it gets paid back in the future. That's just how it goes. The big problem with national debt is Social Security. It is going to run out at some point, and then so many people will be left without retirement money and possibly be unable to pay taxes. This will then make it more difficult to pay taxes and just support the economy in general.
So, yes, the national debt is going to be passed on to future generations.
We’ve answered 328,308 questions. We can answer yours, too.Ask a question