Advertisement

The Review of Austrian Economics

, Volume 32, Issue 2, pp 185–188 | Cite as

Giuseppe Eusepi, Richard E. Wagner: Public debt: An illusion of democratic political economy

Cheltenham, UK and Northampton, MA: Edward Elgar publishing, 2017. x + 178 pages, $120.00 (hardback)
  • Daniel J. SmithEmail author
Article

One of the longest standing debates in political economy is whether public debt imposes a net economic burden or not. At stake is whether governments should reembrace a concern for balanced budgets by seeking to devise and implement operable budget constraints, or, whether governments should drop the remaining vestiges of the concern for growing deficits to better fund government programs and public infrastructure.1 Thus, this debate is particularly consequential given its inextricable connection to the debate on the merits and viability of Keynesianism (Buchanan and Wagner 1997[2000]).

The position that the public debt does not impose a net economic burden, originally staked out by David Ricardo (1817), is that deficit and tax financing are equivalent. This is because citizens within a nation financing a given project or program with public debt will recognize the increase in their future tax liabilities and adjust their behavior accordingly, ensuring that the burden of the debt is...

References

  1. Buchanan, J. M. (1958[1999]). Public principles of public debt. Indianapolis: Liberty Fund.Google Scholar
  2. Buchanan, J. M. (1969[1999]). Cost and choice. Indianapolis: Liberty Fund.Google Scholar
  3. Buchanan, J. M. & Wagner, R. E. (1997[2000]). Democracy in deficit: The political legacy of Lord Keynes. Indianapolis: Liberty Fund.Google Scholar
  4. Ferguson, J. M. (1964). Public debt and future generations. Chapel Hill: The University of North Carolina Press.Google Scholar
  5. Kotlikoff, L., & Burns, S. (2012). The clash of generations. Cambridge & London: MIT Press.Google Scholar
  6. Krugman, P. (2012). Nobody understands debt. The New York Times. 1 January. Available. Online. http://www.nytimes.com/2012/01/02/opinion/krugman-nobody-understands-debt.html. Accessed 21 Dec 2017.
  7. Landsburg, S. E. (2012). Actually, we owe it all to ourselves. The Big Questions. 3 January. Available. Online. http://www.thebigquestions.com/2012/01/03/actually-we-owe-it-all-to-ourselves/. Accessed 21 Dec 2017.
  8. Ricardo, D. (1817). On the principles of political economy and taxation. London: John Murray.Google Scholar
  9. Wagner, R. E. (2012). Deficits, debt, and democracy: Wrestling with tragedy on the fiscal commons. Cheltenham, UK and Northampton: Edward Elgar.CrossRefGoogle Scholar

Copyright information

© Springer Science+Business Media, LLC, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Troy UniversityTroyUSA

Personalised recommendations