Here. As most of you know, this of course ties back to Buchanan too.
Bridges can only be built at a cost and they provide a benefit.
If we pay for bridges with taxes, the taxpayers (whoever they are) pay the cost and citizens enjoy the benefit. Assuming the benefits and the costs match up exactly, society as a whole is no poorer. Hopefully, the benefits exceed the costs!
If we pay for bridges with debt, taxpayers in the future (whoever they are) pay the cost and citizens enjoy the benefit. Assuming the benefits and the costs match up exactly, society as a whole is no poorer. Hopefully the benefits exceed the costs here as well!
There is nothing about public debt that makes us poorer than taxation would have made us.
Public debt does shift which taxpayers bear the cost. Then again, you don't need debt to do that. You can do that in the tax code too. But centuries of experience shows debt markets are a particularly efficient way of raising these funds in a pinch.
The fallacy that Lerner, Baker, Krugman, and those other crazy lefties point out is that you certainly can't say that future national income is threatened simply because we have to "pay back the debt". Why? Because it's just a transfer from a taxpayer to a creditor.
So it is right to say "debt helps us shift the costs through time - presumably to align benefits and costs intertemporally, if we're wise"
It is also right to say "So long as the benefits of an expenditure equal the cost there is no reason why funding something with debt will impose any kind of special burden. We owe it to ourselves. It simply shifts around when this will all show up in the accounting".
Don Boudreaux asks his correspondent to demonstate that deficit financing cancels out the cost associated with public expenditures.
But why would anyone ever think it could do a thing like that?