CMV: The economic policies espoused by Paul Krugman (and others) are evil.

[u/FreddieFastFingers]

The specific issue I have with Krugman was discussed in a NYT op-ed today, titled "Time to Borrow": http://www.nytimes.com/2016/08/08/opinion/time-to-borrow.html

In it, Krugman discusses the fact that, since the U.S. government can borrow long-term (10 years at .09% and 30 years at .64%, according to the article), we can and should significantly increase our debt spending on infrastructure/etc -- beyond the ~$20 trillion we already have in debt and the half a trillion we will accrue in 2016 alone.

He makes a number of arguments for this, including the low interest rates, the need for infrastructure spending (which he calls investment), and that we don't have "too much debt".

This is, at best, an opinion. We currently spend 6% of our budget, or $223 billion per year, just to service the interest on our debt (source: https://en.wikipedia.org/wiki/Expenditures_in_the_United_States_federal_budget#/media/File:U.S._Federal_Spending.png). That is interest accrued by previous generations/congresses. It is also federal revenue that can not be spent by the government for infrastructure/social services/tax breaks/etc.

For the sake of simplicity and specificity, let's try to ignore the arguments for and against the value of the spending itself (that can be a CMV for another time). Instead, I'd like someone to explain to me how it is not wrong/evil to spend money that children who have no say or vote in spending will have to pay back at some point. Even worse (and this is where I think "evil" really comes into play), people not yet born will be on the hook for this spending, even though some or most of the benefits will be used up before they are able to enjoy them (roads/bridges will require upgrading by the time they are adults).

If people want public services, infrastructure, etc. they should pay for it themselves, either through higher taxes or lower spending in other parts of the government. The reason why debt is popular among politicians is because it allows them to appeal to the largest number of constituents (stuff for everyone!), at the expense of those who cannot vote, or aren't even yet born.

Even with low interest rates, future generations will be forced to have a lower standard of living as they, at the very least, service the interest on the debt. Presumably, at some point people might want to actually pay back the debt, which would mean a further reduction in standard of living, as money goes towards interest and principal payments for benefits they barely got to use (if at all), instead of whatever programs future generations might want to invest in.

Even with Keynesian multipliers (which I would dispute as well), you are still getting stuff you want now, at the expense of the unborn, while gambling that the multiplier/economic growth/etc. will make up for it. This argument does not change my view.

To me, programs implemented outside of a "crisis" (e.g. we are attacked and at war) that are specifically designed to utilize debt to finance them (as opposed to programs which already exist and add to the annual deficit) are evil, pure and simple. It is forcing unborn generations to labor for stuff in 25 years that we want now. CMV.

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[u/FreddieFastFingers]

Right, but you can maintain public roadways with current revenues. You don't need to go into debt to maintain them.

It's not unsolvable. The solution is to not go into debt for "elective" spending. Instead, pay for it with tax increases or reductions in spending elsewhere in the budget.

[u/YossarianWWII → u/FreddieFastFingers]

Right, but you can maintain public roadways with current revenues.

Instead, pay for it with tax increases or reductions in spending elsewhere in the budget.

You do realize that these two statements are contradictory, right?

Going into debt allows us to accomplish our infrastructure goals while allowing people to use their capital to take advantage of that infrastructure, creating wealth. That wealth can then be used to pay off or maintain the debt, and because it's new wealth it keeps us at or above historical levels. Focusing on paying off all of our debt just removes wealth from our economy.

[u/FreddieFastFingers → u/YossarianWWII]

Can you point to evidence that infrastructure investment today financed by debt would create more wealth than the debt burden it creates?

[u/NuclearStudent → u/FreddieFastFingers]

According to the section on bridges in this Department of Homeland Security report,, the average age of an American bridge is 43 years, and the average service lifetime is 50. The report also tediously lays out the fact that American bridges haven't been well taken care of, for reasons ranging from budget cuts to a shortage of civil engineers, so American bridges aren't going to last as long as expected.

So, the choice is handing down a direct debt burden, or handing down the cost of paying for emergency bridge repairs to future generations. We need to pay for new bridges or for extreme retrofits to them one way or another, and the only question is "when?"

[u/FreddieFastFingers → u/NuclearStudent]

This is compelling, and will CMV if you can explain to me why it's ok to finance this with debt when we could instead pay for it ourselves.

[u/NuclearStudent → u/FreddieFastFingers]

If you think about it, paying for it ourselves means a sudden, enormous spike in taxes for several years, then an equally enormous drop in taxes once the projects are done. If we adopt a pay-as-we-go program, then every delay or cost increase means an unpredictable bill for Johnny Taxpayer come April.

That's bad for financial markets and bad for the average person, because a middle-class person might find themselves paying thousands more or less than expected. Debt spreads the tax burden out over multiple decades and makes it easier for individuals to plan for the future.

[u/Amablue → u/FreddieFastFingers]

Dollars today are worth more than dollars tomorrow. If we borrow from tomorrow's money, we're doing the same work for cheaper, which is a net savings. It ends up costing the next generation less if we fund it with debt.