Public Debt as a Form of Public Finance
Overcoming a Category Mistake and its Vices
Business & Finance, Economics, Theory of Economics
| Author: | Richard E. Wagner | ISBN: | 9781108758338 |
| Publisher: | Cambridge University Press | Publication: | April 30, 2019 |
| Imprint: | Cambridge University Press | Language: | English |
| Author: | Richard E. Wagner |
| ISBN: | 9781108758338 |
| Publisher: | Cambridge University Press |
| Publication: | April 30, 2019 |
| Imprint: | Cambridge University Press |
| Language: | English |
Economists commit a category mistake when they treat democratic governments as indebted. Monarchs can be indebted, as can individuals. In contrast, democracies can't truly be indebted. They are financial intermediaries that form a bridge between what are often willing borrowers and forced lenders. The language of public debt is an ideological language that promotes politically expressed desires and is not a scientific language that clarifies the practice of public finance. Economists have gone astray by assuming that a government is just another person whose impulses toward prudent action will restrict recourse to public debt and induce rational political action.
Economists commit a category mistake when they treat democratic governments as indebted. Monarchs can be indebted, as can individuals. In contrast, democracies can't truly be indebted. They are financial intermediaries that form a bridge between what are often willing borrowers and forced lenders. The language of public debt is an ideological language that promotes politically expressed desires and is not a scientific language that clarifies the practice of public finance. Economists have gone astray by assuming that a government is just another person whose impulses toward prudent action will restrict recourse to public debt and induce rational political action.
