How could a large government debt create a "burden" for future generations?

A large government debt can create a "burden" for future generations primarily through the mechanism of crowding out private investment. When the government borrows excessively, it competes for available funds in the financial markets, potentially leading to higher interest rates. As borrowing becomes more expensive due to the government's demand for capital, private investors may find it more difficult to secure financing for their projects. This situation can lead to a decrease in overall private investment in the economy.

When private investment diminishes, the stock of capital goods—such as machinery, infrastructure, and technology—tends to fall because there is less investment from the private sector that drives economic productivity and growth. A lower stock of capital goods means that fewer resources are available for businesses, which can lead to slower economic growth and, consequently, a lower standard of living for future generations. They may face a less productive economy with fewer opportunities for innovation and job creation as a result of the reduced capital accumulation.

In this context, the correct answer identifies that the burden of large government debt can manifest in the form of diminished capital accumulation, emphasizing the potential long-term negative implications for future generations.