Comment by AshleyGrant
7 days ago
> but the government does not receive that benefit
Yes it does, through increased tax revenues due to the increased economic activity brought about by the road existing earlier than it would have if the government had to wait several years to save up the money to build that road.
Also, at least in the US, the government is nominally "We the People," so if the general population experiences increased economic activity, then the government is benefiting, as it exists (nominally) for the benefit of the people.
That's a flavor of trickle-down economics that I would like to see research around. If the state borrows $100m to widen a highway today, versus $100m to widen it five years from now without borrowing - then do those extra lanes really bring in tax revenue equal to the interest on $100m within five years? Will the government responsibly retire the debt using the extra tax revenue, plus the money it was going to have to save anyway? Or will politicians just approve another round of borrowing, let the interest accrue, and spend the collected tax benefit from the road on some other project?
Your point about the government being 'we the people' is fair, but the general population experiencing increased economic activity does not pay off the debt unless the government is disciplined enough to use that activity toward that purpose. Also I'll quibble that the phrase "We the People" in the US Constitution is a statement that We, the actual humans of this country, are deciding to create a government to serve us. The government is a creature created by the people, but it is not the people.