Democracy In Deficit

Democracy In Deficit

by James M. Buchanan, Richard E. Wagner
     
 

ISBN-10: 0121388506

ISBN-13: 9780121388508

Pub. Date: 10/01/1997

Publisher: Emerald Group Publishing Limited

Product Details

ISBN-13:
9780121388508
Publisher:
Emerald Group Publishing Limited
Publication date:
10/01/1997
Pages:
208
Product dimensions:
0.63(w) x 6.00(h) x 9.00(d)

Table of Contents

Prefaceix
Acknowledgmentsxi
IWhat Happened?
1What Hath Keynes Wrought?3
The Political Economy4
A Review of the Record5
The Theory of Public Choice6
Fiscal and Monetary Reform8
2The Old-Time Fiscal Religion9
Classical Fiscal Principle9
Fiscal Practice in Pre-Keynesian Times11
Balanced Budgets, Debt Burdens, and Fiscal Responsibility14
Fiscal Principles and Keynesian Economic Theory19
The Fiscal Constitution21
3First, the Academic Scribblers23
"Classical Economics," a Construction in Straw?24
The Birth of Macroeconomics27
The New Role for the State28
The Scorn for Budget Balance30
The New Precepts for Fiscal Policy31
Budget Deficits, Public Debt, and Money Creation31
The Dreams of Camelot34
4The Spread of the New Gospel37
Introduction37
Passive Imbalance38
Built-in Flexibility40
Hypothetical Budget Balance41
Monetary Policy and Inflation42
The Rhetoric and the Reality of the Fifties43
Fiscal Drag46
The Reluctant Politician47
Political Keynesianism: The Tax Cut of 196448
Economists, Politicians, and the Public50
Functional Finance and Hypothetical Budget Balance51
5Assessing the Damages55
Introduction55
The Summary Record56
Budget Deficits, Monetary Institutions, and Inflation58
Inflation: Anticipated and Unanticipated59
Why Worry about Inflation?61
Inflation, Budget Deficits, and Capital Investment64
The Bloated Public Sector69
International Consequences71
Tragedy, Not Triumph72
IIWhat Went Wrong?
6The Presuppositions of Harvey Road77
Introduction77
The Presuppositions of Harvey Road78
The Economic Environment of the "General Theory"81
Strings Can Be Pulled82
The Great Phillips Trade-off85
Post-Keynes, Post-Phillips87
Reform through National Economic Planning89
7Keynesian Economics in Democratic Politics93
Introduction93
Budgetary Management in an Unstable Economy94
Taxing, Spending, and Political Competition96
Unbalanced Budgets, Democratic Politics, and Keynesian Biases98
Deficit Finance and Public Sector Bias103
8Money-Financed Deficits and Political Democracy107
Introduction107
Budget Deficits Financed by Money Creation108
Benevolent and Independent Monetary Authority111
The Political Environment of Monetary Policy114
The American Political Economy, 1976 and Beyond121
9Institutional Constraints and Political Choice125
Introduction125
The Public Economy and the Private126
Fiscal Perception and Tax Institutions127
Debt-Financed Budget Deficits134
Money-Financed Budget Deficits142
Institutions Matter144
IIIWhat Can Be Done?
10Alternative Budgetary Rules147
Budget Balance over the Cycle148
Built-in Flexibility149
Budget Balance at Full Employment151
The Budget Reform Act of 1974156
Short-Term Politics for Long-Term Objectives158
11What about Full Employment?161
Introduction161
Current Unemployment and the Quandary of Policy161
The Keynesian Theory of Employment164
The Inflation-Unemployment Trade-off166
The Inflation-Unemployment Spiral168
Biting the Bullet170
So, What about Full Employment?171
12A Return to Fiscal Principle173
The Thrill Is Gone173
The Case for Constitutional Norms175
The Case for Budget Balance176
Fiscal Decisions under Budget Balance177
Tax Rates and Spending Rates as Residual Budget Adjustors178
A Specific Proposal180
Debt Retirement and Budget Surplus181
In Summation182
Author Index187
Subject Index191

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