It is received Liberal Wisdom that inequality has already created tears in the social fabric. Conservatives tend to discount this idea. But it seems that if you believe inequality and/or inequal treatment are problems with significant social ramifications, you might also accept Arnold Kling’s contention that the divide between ‘lenders and spenders’ could cause social breakdown:
If this little lullaby (“the debt is something we owe to ourselves”) helps you sleep, then you may be in for a rude awakening. Government debt frays the political fabric, and we are feeling its effects already….
The burden of the debt is that we create an ever-deeper conflict of interest between Lenders and Spenders. Yes, if you think of Lenders and Spenders collectively, you can say that “we owe the debt to ourselves.” But that is a dangerously vacuous way of looking at it. Large government debt is a recipe for a bitter political stew.
Liberals show measurably less concern for building the debt right now, most notoriously Paul Krugman, to whom Kling is responding. Yet it seems as likely to create social divisions as the growing pre-tax income inequality in the U.S. Is it impossible to consider more than one potential tear in the social fabric at a time?