We must borrow and build infrastructure

This reflects a fundamental lack of understanding of how government debt works. Individuals have to repay debt because of their life cycle, business and government do not have to repay debt, but maintain it and use it to gear progress and development. 

With GDP growing at 6 per cent per annum, debt as a percentage of GDP drops at 6 per cent per annum. It never has to be repaid. It simply melts away as a proportion of GDP. At 6 per cent per annum debt drops to half in 12 years, and a quarter in 24 years, well before the next-generation become taxpayers.

As an example of how debt should be allowed to melt away, the iconic Sydney Harbor Bridge cost $8 million in the 1930s. This is equivalent to .00057 per cent of current GDP. Governments should have recognised that the boost to economic activity and taxes generated by the bridge was more than paying for debt servicing costs, and just allowed the debt to melt away.

In any case, the net gain from paying off debt is the borrowing rate less the inflation rate, and boils down to a tiny 2 or 3 per cent per annum return: A terrible waste of taxpayer dollars.

Another point to always bear in mind is that trying to pay for infrastructure out of taxation is an offence against the basic fiscal principle for just such finance - current expenditures should be met out of current revenue, and long-term asset purchases should be met by borrowing.

Fear that ”borrowing will burden the next-generation”

This is silly economics. It Is Australia's classic economic furphy, as discussion immediately above makes clear.

Under the recommended program, with debt staying at only 10 per cent of GDP, the next-generation, rather than getting a burden, would get wonderful benefits

They would get a comprehensive updating of our physical infrastructure, with all the social amenity, economic efficiency increases, employment opportunities, and improvements in international competitiveness that this would bring.

All this for probably no net servicing costs over time, and a national debt tiny as a proportion of GDP.

There should be a general recognition that anyone who makes this silly claim about the next-generation should be seen to be engaging in woolly thinking.

Fear that total net debt will run away if we have another world setback