Sir: Hamish McRae ("And shall our children inherit the deficit?" 6 April) expresses the widely held view that a government deficit has to be "paid for" by future generations. This is surely a misconception. A government deficit will require a transfer of funds, within a future generation, from taxpayers to savers/lenders. The future generation of taxpayers will not be paying the current generation of lenders but their descendants in the "future generation".
The only meaningful way in which one generation pays for another is in long-life projects, such as infrastructure or housing, where the earlier generation is paying for the succeeding generation. This is probably the main reason why, in practical terms, most generations are better off than their predecessors, and societies that invest heavily in reasonably useful projects do particularly well.
However, I don't think large deficits are a good idea, because they will be tough on future taxpayers.
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