In an article about Social Security, John Fund quotes economist Paul Samuelson saying in 1967, "a growing nation is the greatest Ponzi game ever contrived. And that is a fact, not a paradox." He's right, and he said it in a more elegant way than I managed to do when I wrote about deficit spending or functional density. The reason modest deficit spending for a nation is perfectly sustainable for eternity is that a growing population will always be able to pay the debts of their ancestors more easily than the ancestors themselves -- simply because there's more of them. The system only starts to collapse, like Social Security, when the population growth can't keep up with the expenses. As I've explained before, the factor of increasing population explains why deficit spending works for nations but not for individuals... unless individuals bring in more money each year than the year before, and their deficit rate is less than their growth rate. That's the expectation college students have when they borrow money for tuition, and it's usually smart for them to finance the future.

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