A common reason given by those opposed to deficit spending is that we need to save up funds now for when the ratio of retirees to workers increases, as populations age. Otherwise retirees will be a burden on the young.
There is a very serious flaw in this idea. The real problem with an increase in the retiree/worker ratio is that workers will need to be much more productive. A smaller number of people will have to provide all the goods and services for the same size population. Of course it would also help if people could extend their working lives. Money saved now will not help address these problems when they arise. Instead it will just mean that there will be higher inflation since there will be more money available to spend but fewer goods and services to buy. In order to increase future productivity and possibly extend our working lives it is important to spend money NOW in ways that increase future productive capacity. That means better education and healthcare, more research and more investment in infrastructure etc etc. Instead we are foolishly cutting spending in all these areas to save money to spend in future. But money can be created at the stroke of a computer key. Infrastructure, technology, intellectual capital, and a productive workforce take many years to produce. Those deficit hawks claiming to be sensible and thrifty are instead being foolish and reckless.
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