.. Once we realize “the nation” is composed of different individuals who enter the scene at various points, live for varying lengths of time, and then die, to say “we owe the debt to ourselves” is a complete non sequitur.
.. imagine the government in the year 2012 is going to spend $100 billion throwing a gigantic party. Other things equal, the people alive in 2012 would love this massive bout of consumption. However, if the government were to levy a tax on the people in 2012 to pay for it, they would revolt.
If an imperialist government paid for popular spending programs by levying a tax not on its own citizens but on a conquered land, the scheme would of course be a gigantic theft working across space and through the currency markets. Deficit finance is similar, working across time and through the bond markets. It allows today’s citizens to pay for government goodies by levying a tax on unborn generations who have no say in the political decision.