Forum Post: Is Government Borrowing the Real Issue?

I might not be looking at this right, so, please, feel free to correct me. But what I have gathered from all the information I have gathered is that government borrowing is what created this mess in the first place?

When we purchase something on credit, what we are really doing is saying that I want to use my future work to pay for this good or service. I am promising to work into future plus a little more to enjoy the good or service now as oposed to later.

Same thing with a student loan. The student assumes that the loan is an investment in their future, and future earnings based on today's investment will cover the loan. For credit to be suessfull, the future has to be brighter than today. Then we can borrow from the future indeffinetly, meaning we assume we have unlimited wealth potential and become very wasteful with our resource management. It also leads to less innovation because innovation is not needed to obtain wealth because we can just borrow indefitly from the future.

But this is not reality. In reality we are borrowing from our children and our children's children. We are also over consuming our resources, leaving less for the future generations.

Because credit adds these future dollars into the economy today, this inflates the economy. Eventually all money is based on credit, devaluing today's work to nothing because it has already been spent in the past.

Because government borrowing is the leading contributor to inflation, if the government was not allowed to borrow money, then allowed to operate as the Fed does to manage inflation, like adjust interest rates, then we might not see such a great rise in wealth, because we could only borrow so much from the future, but we would not have such drastic collapses either because future generations wouldn't have as much of an obligation to pay for the borrowing of the past, and could still borrow from the future.