One more aspect to this: there is NOT a direct link between authority to spend and authority to borrow.
Consider: I purchase a $100,000 home.
- At the time of purchase, I can get a loan for the entire amount at 1% interest.
- Two years later, interest rates are up. I need to refinance... and now due to the cost of money, I can't actually afford to borrow the whole amount.
- Over time, if interest rates rise, the cost of interest for paying back that loan may be much higher than the original cost of what I purchased.
Ultimately, it IS irresponsible to say we can borrow any amount we want to cover what we've authorized as expenses.
Go look at the current US Treasury big picture, at US Debt Clock dot Org. The "Unfunded liability" is literally...
- the Present Value of
- all legally authorized future expenditures
- for which there is no known source of income
Right now, the guaranteed future benefits authorized by congress are so large, that to pay them off over time, every person in the USA needs a bank account, TODAY, with over $500,000 -- extra, ready to give to the US government. [UPDATE: I didn't say we SHOULD give it. But you need that much already saved. Because the growth of those savings would be needed to pay for it. Your current income pays for other stuff!]
It's so big, it almost exceeds the entire value of all investment, property, etc in the USA. Totally irresponsible. [UPDATE in April 2023: now it DOES exceed! And that's just Federal.]
UPDATE: Another aspect to consider: apart from government, the rest of the economy shrinks and grows over time. When times get tough, people reduce spending, when times are good, we save. (Look it up, it's true ;) ).
We talk as if borrowing is an economic good that's easily reversible by paying it off. YES for normal people... but is that true for governments?
QUESTION: Do you have ANY idea how long it's been since the federal government (apart from one-time big "push" expenses) shrank its per-capita spending or shrank its debt? ANSWER: 1957! (1965, taking inflation into account.)
Ever since I was born, we just spend more, no matter what.
(UPDATE: The Obama admin led the way to a guaranteed future meltdown, BTW. Look at the August 2016 CBO budget estimates for the future. Rapidly increasing deficits, going well beyond a trillion a year. In fact, growing so much they switched from dollars to GDP percent. And it just grows forever even as a fraction of GDP.)
More debt makes zero sense. Yet it's now baked into the budget.