>Deficit finance is a second resort, if immediate taxation
>is not possible. If you allow that the spending is worthwhile,
>it follows that it's worth the cost, even if the rich evade
>paying for it.
But if the debt/GDP ratio is constant you're probably not adding any new programs, though you're still wasting money on debt service. If the debt/GDP ratio is rising, you may be adding new programs, but at some point the creditor class is going to get pissy and demand retrenchment - or, as Jim O'Connor said somewhere, debt increases capital's power over the state. And you'd be wasting an ever-increasing amount of money on debt service. Seems to me that permanent deficit financing (as opposed to the short-term fiscal stimulis kind) is rather like the liberal approach to litigation - an evasion of building popular support for a policy, and its replacement by a vulnerable and temporary fix.
Doug