Government borrowing is theft

26 May

Government borrowing is theft. It’s theft from our children. It’s a cynical plundering of the future.

Let’s imagine a business that can earn a 10% return on money it invests. It makes sense to borrow at 3% to invest more, getting a net 7%. It makes good sense.

But Governments don’t borrow for investment opportunities. They don’t get a return. They borrow because they run out of cash. They have promised too much in State handouts and purchases.

So they borrow. Future taxpayers can pay the bill!
In fact, they borrow so much that the future taxpayers are now our children!
They have borrowed so much that the interest payments almost match the tax receipts! The borrowings can be reduced but only by increasing taxes.
That’s not good for winning elections. So they borrow more instead.

The government is not reducing borrowing. It is just reducing the rate at which they are borrowing more!
They are merely reducing the rate at which they steal from our children!
They love spending other people’s money.

What can be done? Increasing tax is difficult when the country is on it’s knees – recession, unemployment.

In the steady state, Governments should live within their tax receipts.
To get there, reducing government outgoings is the only way – however hard it is.

Gordon Brown used to call his spending “Government Investment”. It was a cynical misuse of words to cover up his grand larceny on the future.

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