[ExI] libertarianism

Dan TheBookMan danust2012 at gmail.com
Tue Oct 23 20:57:33 UTC 2018

On Oct 23, 2018, at 1:16 PM, William Flynn Wallace <foozler83 at gmail.com> wrote:
> John Clark wrote:
> a dollar today is worth more than a dollar tomorrow and that's why people borrow money and that's why interest exists.
> ------------
> Is this why some people I've heard say that a balanced budget is a bad idea?   That debt is a good thing?  bill w

Cutting in a discussion I will try to follow more closely, debt financing has the immediate benefit that the government doesn’t raise taxes right away. This creates perverse incentives since it will then borrow more than it would tax all else being equal. (Taxes being more direct affect the taxed party faster.) Also, since it’s harder to forecast who will be taxed in the future — will the government, say, impose a higher tax on X rather than Y when it comes time to pay down (some of) the debt (or use inflation or other measures) — it creates more uncertainty. 

Debt also binds the lender to taxation — creating a base of support for increased taxation — and to spending — net lenders often want to lend again. Again, more perverse incentives.

This isn’t a praise of taxation. Taxation is simply a less perverse form of coercion than the other two major forms of government funding: debt and inflation. (Inflation is probably the worst of the trio since it tends to distort the overall price system and hurts those on fixed incomes.)


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