A political columnist wrote the following:
Today … the main purpose [of governments
issuing bonds] is to let craven politicians
launch projects they know the public, at the
moment, would rather not fully finance. The
tab for these projects will not come due, probably, until after the politicians have long since
departed for greener (excuse the expression)
pastures.
Do you agree with this commentator’s explanation for
why some government spending is financed through
tax receipts and other government spending is financed
through borrowing, by issuing bonds? Briefly explain.
Source: Paul Carpenter, “The Bond Issue Won’t Be Repaid by Park
Tolls,” (Allentown, PA) Morning Call, May 26, 2002.