“Horror of debt is particularly marked in the elderly, perhaps out of an ancient feeling that one should not meet one’s maker with a negative balance sheet,” Robert Skidelsky writes for Project Syndicate about the “scarecrow of sovereign debt. Most people are worried about national debt than about taxation, he says, but while national debt, in nominal value, is increasing, the tax base is growing as well. People tend to rely on a “gut feeling” that when nominal levels of debt increase to a big number we should all be afraid and that it’s “a very bad thing.” “One website features a clock showing the [UK’s national] debt growing at a rate of [GBP 5,170] per second. Although the tax take is far less, the UK government still collected a hefty [GBP 750 bn] in taxes in the last fiscal year. The tax base grows by the second, too, but no clock shows that.”

The argument that expanding national debt will add to the “burden on future generations,” has also been disproved, Skidelsky posits. “The economist A. P. Lerner pointed out its fallacy years ago. The burden of reduced consumption to pay for government spending is actually borne by the generation which lends the government the money in the first place. This is crystal clear if the government simply raises the money it needs for its spending through taxes rather than borrowing it. Furthermore, the idea that additional government spending, whether financed by taxation or borrowing, is bound to reduce private consumption by the same amount assumes that no flow of additional income results from the extra government spending – in other words, that the economy is already at full capacity. This has not been true of most countries since 2008.”