Compare two scenarios:
An Entrepreneur in, say, 19th-century Virginia thinks a railroad to California will make lots of money. He gets some venture capitalists to back him and then also sells bonds. His plan works, and suddenly the price of travel and transport goes way down. Now there is more commerce between the East and West coasts. Everyone profits, including our entrepreneur. He makes good on the bonds out of the increased capital and productivity.
The US government sells bonds. How much of that actually goes into profitable enterprises that increase productivity? Not much. Most of it goes to immediate consumption. So where is the future payoff coming from? Nothing but the promise of future taxes on future taxpayers. But these taxpayers are not only going to have to pay the debt, they have also had all their savings diverted by the government’s enticements. Instead of investing in projects in developing countries (that are left in a perpetually impoverished state rather than being developed) people have been enticed by the “safety” of government bonds.
There is no way to pay back the debt because what was borrowed was never used to produce anything of value (or most of it wasn’t). It was just consumed.
Remember, these are loans with interest. To “pay off” just the principle is not
enough to avoid default. And there is no reason to think that future generations can 1) meet their own needs, and 2) meet the payment schedule for the debt without continuing to get deeper into debt.
The default is coming.
But what about the morality of the situation?
It is simple: parents do not have the right to enslave their children, grandchildren, great-grandchildren and more. The people who spend the money and the people who pay on the debt are two different groups of people.
I don’t think they’re obligated to pay a dime.
As a related post: you might want to read my take down of the “we owe it to ourselves” mantra.