As contrasted with taxation, which must impose a current real burden on individuals, debt creation provides one way of financing public services without current cost. It provides a means whereby taxpayers in any given period may shift or postpone the payment for public services to the shoulders of taxpayers in future periods. “Future generations” may be exploited through the choice of debt issue to finance public services.
Explaining this truth – a truth that, in the middle of the 20th century, had been lost in the avalanche of confusions that is Keynesian economics – was the object of Buchanan’s first book, Public Principles of Public Debt  (1958). This book is brilliant; it’s one of the most tightly reasoned and thorough books that I’ve ever read. But Chapter 27 (“The Principles of Public Debt”) of Buchanan’s 1960 textbook, The Public Finances (from which the above quotation is drawn), offers in a mere 18 pages a marvelously clear summary of the main themes of the 1958 book. Reading this chapter of the 1960 textbook is a pretty good, if not perfect, substitute for reading the entire 1958 book.
Despite the fact that much of it is now dated – mainly the parts discussing the U.S. fiscal situation circa 1960 – it’s too bad that The Public Finances is out of print.
Pictured above is Rouss Hall, on the Lawn at the University of Virginia. UVA’s Department of Economics was long housed in Rouss Hall, as it was when Jim Buchanan did his pioneering work on the burden of public debt, as a UVA economist, in the late 1950s and early 1960s.