Moreover, the debt being accumulated today is mostly not being used to produce assets that will be of use to future generations, but rather for the current welfare state. If the government were limited to building assets like freeways and airports, it’d have no need for deficits, and I’d be a lot happier.

Even though generations don’t neatly end and begin in defined chunks, ideally, each new generation could vote whether they accept both the assets and the debts the preceeding generation has left them. I they didn’t, the assets would be sold to pay off the debt.

Personally, I use the freeways, powerplants, airports, etc. that were built before I was born.

I’m saying that if you lend to the government money that can only be paid back by taxing future taxpayers, you don’t have a moral right to expect that those taxpayers will actually pay you back. It is probably unwise for them to refuse, but it’s not immoral. This is because they never– not individually and not collectively/democratically– had any choice in whether to contract the debt obligation, and taxation without representation is wrong *even if* taxation in general is OK.

It is thus not necessary to be a “sectarian libertarian” to accept this argument. The notion that taxation without representation is wrong is not a fringe one, and indeed is taught as part of every high school US history class– though perhaps not many think through its implications.

There’s no “deserving of punishment” here, nor do any of your other silly pseudo-implications actually follow. And BTW, I don’t claim to speak for the Entire Libertarian Movement ™ in saying this. I have no idea how prevalent my view on this is.

If I understand your argument, it is that a bondholder is culpable in lending money to the government in the first place, since her security comes from future taxpayers who don’t get to vote (and who didn’t ask to be born!). So they deserve it if we just default, whether we have to or not.

In your world, pretty much every American must be culpable and deserving of punishment. Those bastards who have federally insured bank deposits for instance. Bonny and Clyde had the right idea! Those damn kids in public school. Don’t ge me started about those seniors.

Basically, you are saying that anyone who does not abide by your sectarian libertarian morality (which few Americans would even understand, let alone consider binding) has no rights.

The argument against long-term peacetime government debt does not require that one be against all taxation. You’ve heard of “taxation without representation”, right? If somebody buys a 30-year bond from the government, many of the people responsible for paying it back will not even be *born* at the time the bond is issued, and so had no vote on whether it was going to be issued. How is it legitimate to bind those people, individually or collectively, to a debt obligation which they did not in any sense choose?

And the “unjustified transfer” bit holds no water at all. Suppose A robs B and sells the stolen goods to C, who thinks they aren’t stolen, and then B demands that C give him back his stuff. C cannot rightly refuse on the ground that he bought the stuff innocently and the transfer from him to B is unjustified. Likewise, if bondholders buy illegitimate debt instruments– debt that should not have been accumulated– they have no business complaining when the taxpayers of tomorrow refuse to pay back debt that was immorally accumulated without their consent.

Your argumentation is circular, in the sense that it can only convince an already-committed libertarian. For you, promises backed by taxes are always wrong. If I accepted that, then, of course, I would be committed to getting rid of Social Security (although I don’t see why Bush or Cato’s scheme would be an improvement).

But, of course, I don’t think that. Promises backed by taxes can be good, depending on the consequences.

Social Security is similar in principle to, but better than, ownership of government bonds (or, if you are that purist, a federally insured bank deposit). A promise to pay $X 30 years from now is nice, but a promise to pay 60% of your pre-retirement income up to a maximum is better, because it spreads various risks that the first promise doesn’t.

This program is widely popular. If the Democrats kick Bush’s butt on this, then it will, in effect, be a property right.

On the question of posterity’s obligation to pay public debt, I think you need to distinguish between the morality of accumulating the debt in the first place and the morality of paying it back. Accumulating the debt in the first place will be immoral unless it is invested in ways that leave posterity with assets worth more than the inherited liabilities. However, even if the debt should not have been accumulated, to repudiate it is just an unjustified transfer from bondholders to taxpayers generally. Not to mention that the transfer will make everyone worse off.

There is also a practical difference in degree, thus a difference in “status as ‘property right’”. SS benefit reduction, default on government debt, and outright expropriation of people’s houses are, we agree, all unlikely events. But I think it’s clear that they are of three different degrees of unlikelihood, and go from most to least likely in the order stated.

As to the morality of default: defaulting on debt is immoral if the expectation of payback is itself legitimate and moral. When the debtor is a private actor who is paying the debt out of his/her own assets, this is the case. But the expectation that future generations will be taxed to pay government bondholders back, whether they want to be or not, is not a legitimate one. Certainly it is essentially fraudulent for the government to create such an expectation. But foisting the cost of the fraud on an innocent and unwilling third party only compounds the crime.

If I lend money at high interest to a corporate vehicle for a high interest rate, then I still expect the company to try to pay me back, but it is a bit different.

Anyway, if you don’t think there is any moral difference or difference in status as “property right” between Social Security and owning bonds, then my work here is done.