Re: [Pen-l] Vulnerable logic in Dean Baker's argument?

[Doug Henwood <dhenwood@xxxxxxxxx>]

On May 18, 2009, at 10:13 AM, Bill Lear wrote:

> Dean Baker writes the following, in his "The Bankrupt Debate Over
> Bankrupting Our Children" (2009-5-11 from Truthout):
>
>  At some point, everyone alive today will be dead. At that point the
>  government bonds that constitute the debt will be owned by our
>  children or grandchildren. In other words, our children and
>  grandchildren will be paying the interest burden to themselves. If
>  future generations both receive and pay the interest on the debt then
>  how can it be on net a burden to them?
>
> Isn't it true that "our children and grandchildren" will be paying the
> interest burden mostly to wealthy bondholders (the "Wall Street crew"
> that Baker decries) since bond ownership is presumably quite unequally
> distributed?

That, plus he's ignoring quantities. They could be paying "themselves"  
- meaning an inter-class transfer - 2% of GDP in debt service, or 10%.  
They could be doing something else with that 8%, like coping with  
climate change or taking longer vacations. What we do today does have  
an effect on our descendants.

Doug
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