True or false?
False. Nobody will lend money to an individual who cannot reasonably pay it back. If the borrowing individual has a sufficient estate, then the loan will be repaid from that estate upon his death. If he has no estate, he will be required to take out life insurance for the amount borrowed. The problem of intergenerational transfer arises in the case of government borrowing because the servicing of the debt is guaranteed by taxation on future generations---borrowers can extract wealth from the rest of the community because someone else has to pay back the loan.