Borrowing from the future
" The crisis is caused by excessive debt " " You can't borrow your way to prosperity " (video) " We need a recession to clean up the rot " " We have borrowed prosperity from our grandchildren - transferring consumption through time" Economic illiteracy , all of it. We can only consume today what we can produce today. Was your iPod made in a factory built in 2016? Monetary transfers (i.e. debt) cannot create new goods or services. You cannot transfer consumption from the future. But it is a common fallacy to think you can. There are three kernels of truth in this viewpoint, and some of them give us a clue to the real answer: Individuals can transfer consumption from the future to the present by borrowing money from other individuals. But there is an entry on the other side of this ledger - the lender is transferring their own consumption from present to future. The net effect on the whole system is nil. Countries can do the same - if America...