By talking about "resource allocation", you are ignoring the dynamics of credit and debt. Resources aren't fixed, because labor (a very important resource) is very flexible. You are not just allocating resources within the economy, you are promising people resources in the future. People work harder if they are promised resources later on, but only while that promise is credible.
Creating lots of debt makes people work hard, and creates the illusion of wealth. People do jobs, because you told them you would pay them. People spend money, because they know you are going to pay them. Paying off the debt is where things come unstuck.
The government took on a lot of debt, which made everyone work harder and spend more. But that creates a future issue when the government has to pay that debt back.
Creating debt is similar to creating new money - it speeds things up (which is generally seen as good), but can cause people to start doing irresponsible things (which doesn't show up until somebody asks what the elephant is doing with the sofa).
Creating lots of debt makes people work hard, and creates the illusion of wealth. People do jobs, because you told them you would pay them. People spend money, because they know you are going to pay them. Paying off the debt is where things come unstuck.
The government took on a lot of debt, which made everyone work harder and spend more. But that creates a future issue when the government has to pay that debt back.
Creating debt is similar to creating new money - it speeds things up (which is generally seen as good), but can cause people to start doing irresponsible things (which doesn't show up until somebody asks what the elephant is doing with the sofa).