There's been some more stuff recently on the role of public debt in inter-generational transfer, including from Nick Rowe, Roger Farmer and Simon Wren-Lewis. It is remarkable that this topic causes so much disagreement, but in my view it is a good issue to discuss because it highlights the important role of asset balances.
I think one of the things that causes so much confusion here is that this inter-generational transfer cannot happen without the willing participation of the private sector. Some people object to the notion on the basis that they cannot see how those alive today can be bound by what happened in the past. But actually what is happening here is to a very great extent driven by the choices made by private individuals.
For a start, government debt can only arise in the first place if people wish to save. It is quite correct that we cannot take resources from the future. Some people can have more today, but only if others are willing to go without today, in the anticipation of more tomorrow.
Secondly, there is only ever a question of a burden on future generations if and when people wish to dissave, i.e. to spend out of their savings. If people are prepared to hold on to public debt forever, then there is no great consequence. (This is what happens in the Ricardian equivalence world, where planning over the infinite horizon means spending only income and not principal, from investments).
What gives rise to the potential burden is the possibility that at some point people will wish to reduce their bondholdings, by spending out of their savings. If they do so in some future period, then real resources will have to be found for them in that period. Maybe this can come from persuading others to save, but maybe it has to come by taxing them. This is when the inter-generational transfer bites.
So the transfer arises from private decisions to save and dissave. These are being made the whole time. There is a continual turnover of some people accumulating financial assets and others running theirs down. In general people do not want to spend in any period the exact amount they earn in that period. All these plans ultimately have to tie up, which means that in some periods there will be increased competition for available resources and in others there will be less. If you are unlucky enough to be living at a time when there is increased competition for resources then you will be squeezed and they may have to be through higher taxation.
Recognising the key role of private decisions in this process is important, because it helps us see that, whilst public debt is part of the mechanism through which the inter-generational transfer happens, it is more of a symptom than a cause.