Intergenerational Justice and Debt

Discussions of public debt often take on an intergenerational character. Balanced budget amendments and austerity policies are justified by appeal to the idea that high levels of national or state debt represent an unfair burden on the future. Conversely, debt forgiveness campaigns that appeal to the International Monetary Fund and World Bank often suggest that debt harms the interests of the future citizens of the indebted nation. In response to these issues, this chapter makes three significant points. First, it argues that, somewhat controversially, states are often more likely to undermine substantive justice by taking on too little debt rather than by taking on too much. This section looks at the best available evidence from macroeconomics on the relationship between debt and economic growth. Second, the chapter examines the procedural issues for making debt policy decisions and how they can more reliably reflect the interests of the future; it argues in favor of a guardianship paradigm for intergenerational procedural justice. The chapter also shows that sustainable infrastructure is necessary to complement the guardianship paradigm by generating a convergence between justice-based motivations and economic self-interest. Finally, the chapter argues that questions of global and intergenerational justice are inextricably linked in the context of public debt because global injustice often limits the ability of some states to properly manage their fiscal affairs.