Deficit Reduction DIY

Count Ricardian equivalence as another economic dictum that might be sound in principle but often worthless in practice. Jacob at Everybody's Illusion say that if you have a cow with the deficit and its impact on future generations, simply work out your share of the deficit and square that money away as treasury bonds. Gift the money to your kids with the understanding that it is for repaying the deficit when it finally gets called in. Since the money you put away will be the same money that you would pay if taxes were raised tomorrow to pay for the deficit, surely it's six-of-one/half dozen of the other. Sounds good, right?

Let's say you follow Jacob's plan and unilaterally eliminate your share of the deficit. Your offspring (provided they can keep their mitts off the cash) are insulated from the destabilizing effect of the (inevitable) future tax hikes. But what about everybody else? Unless everybody in America followed Jacob's plan, you are still going to have a society plunging towards financial meltdown. Not a pleasant fate to contemplate for your sprogs.

Yes, yes. I know that Jacob probably did not intend anybody to actually take his suggestion seriously. But he presented this idea with enough gravity that I'll bite. I have a hard time telling when libertarians are being flippant, rather than simply naive.