Government's Borrowing Power

Government's Borrowing Power refers to the ability of government to borrow.

Characteristics
Arguments in favor of Arguments opposing
It provides ability for government to borrow.
Government's borrowing power provides a source of funding for government expenditure (especially during a cyclical decline in tax revenue). Government's ability to borrow may be abused to finance government waste as the impact is not immediately felt by the citizens.
The borrowed amount plus interest shall be repaid at its maturity.
The interest payments on government debt can act as a deterring factor for excessive borrowing. The interest payments on government debt may be financed through new borrowing, potentially resulting in perpetual borrowing and unsustainable levels of debt.

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Competing Views...

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Ronald Reagan: "We don't have a trillion-dollar debt because we haven't taxed enough; we have a trillion-dollar debt because we spend too much.", Remarks at the National Association of Realtors' Legislative Conference, March 29, 1982, [URL]

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