Borrowing From OUR Future (a follow-up to “Are we luring migrants to their deaths?”)


bad debtRecently, my fellow contributor David Hiscox wrote about the link between the expansion of social services and increasing national debt.

As I read over his article linking paying for social services with deficit spending, and the deaths of boat people at sea, I found myself wondering if the implications of his opening question, “If the governments of third world countries can’t spend money on social services because they don’t have the money, how is it moral for the governments of first world countries to spend money they don’t have on social services?” – could be pushed a little further.

Travel with me for a moment into a prototypical world where there is a country-X who has borrowed money from a country-Y. Now country-X also has a several decades long history of borrowing money, and acquiring debts which they are failing to pay back.
How would we (as citizens of country-X, country-Y, or a third country-Z) feel about this? I imagine that we would have two main responses:
1) We would be concerned for country-Y’s long-term economy. We do not know the economic stability of country-Y, and it may well face hardship if country-X cannot meet their commitments.
2) We would be critical of country-X for making such an unrealistic offer, and keen to see them get their present debts in order (even if this is a long-term plan) instead of perpetually robbing-Peter-to-pay-Paul.

An important point here, is that this argument holds whether or not country-X genuinely intends to pay the money back. The point stands either way: If a country has a history of not clearing their debts, then we would be rightly sceptical of them taking out more loans.

And, coming back to David’s point about the legitimacy of social security paid through deficit spending, here lies a valuable insight into why Labor & the Greens have continually been reminding us that our current level of debt is not a genuine concern – saying, “But we have a triple-A credit rating!”

The message here is that we are not like country-X, in short, it’s okay for Australia to keep borrowing money to fund unsustainable levels of public spending and social security (at least for a bit longer!) because our reputation is still good compared with other countries.

This is seductive language, and may sound initially sensible, but unfortunately for those of us in Gen-Y and younger who (if this approach continues) will be saddled with more debt than any generation before us, it’s also a category mistake.
One’s reputation regarding one’s actions compared to others’ actions, can only give you a relative and potentially unstable gauge on those actions, it is not a reliable guide to the ethics or sensibility of those actions. And (particularly relevant to our Australian context), if it is a reputation relative to the highly-questionable actions of others (Greece is a current case in point) – such a gauge will actually be highly misleading.

Put simply, just because there are other countries that are foolishly ‘borrowing from their future’ and choosing to cripple younger generations by unsustainable levels of spending in the present, does not mean that it is ethical or sensible for us to do the same. It is unpopular to state that current spending is unsustainable and it takes genuine self-discipline to reject unrealistic levels of governmental support. But young people must have the confidence to take the long-term view and speak up now – because it is not just the country-Y’s (countries to whom we owe money) that will suffer when we struggle to meet our commitments – but us because they are, quite literally, BORROWING FROM OUR FUTURE.