(Gary Marshall) One of the big arguments against government borrowing comes from James Buchanan, winner of the Nobel Prize in economics in 1986. In his book Public Principles of Public Debt, he argued against government borrowing because he claimed that the public enjoys the benefits of public expenditures while the debts incurred pass along to future generations for settlement. Buchanan surmised that if residents endure no consequences for funds borrowed and spent, little constraint exists to dampen the fiery spending aspirations of government bureaucrats and leaders. It would not be very different from a person indulging every consumptive whim while handing the bill to distant progeny.
Public Debt
The Abuse of Public Debt—and How It Sets the Stage for Economic Disaster
(Daniel Fernández Méndez) The 2020–21 recession has been devastating for the global economy. It has been ninety years since the global economy last suffered through a recession of this magnitude (in the Great Depression). Nonetheless, it seems that the social effects of the current recession have not yet come about. The reason for this disparity between cold macroeconomic data and popular sentiment can be found in the enormous public spending by practically all of the countries in the world.1