Democracy in deficit : the political legacy of Lord Keynes / James M. Buchanan and Richard E. Wagner.

Format:

Book

Author/Creator:

Buchanan, James M.

Wagner, Richard E., author.

Language:

English

Subjects (All):

Fiscal policy--United States.

Fiscal policy.

United States.

Keynesian economics.

United States--Economic policy.

Economic policy.

Physical Description:

xii, 195 pages ; 24 cm

Other Title:

The political legacy of Lord Keynes.

Place of Publication:

New York : Academic Press, [1977]

Contents:

I What Happened?

1 What Hath Keynes Wrought? 3

The Political Economy 4

A Review of the Record 5

The Theory of Public Choice 6

Fiscal and Monetary Reform 8

2 The Old-Time Fiscal Religion 9

Classical Fiscal Principle 9

Fiscal Practice in Pre-Keynesian Times 11

Balanced Budgets, Debt Burdens, and Fiscal Responsibility 14

Fiscal Principles and Keynesian Economic Theory 19

The Fiscal Constitution 21

3 First, the Academic Scribblers 23

"Classical Economics," a Construction in Straw? 24

The Birth of Macroeconomics 27

The New Role for the State 28

The Scorn for Budget Balance 30

The New Precepts for Fiscal Policy 31

Budget Deficits, Public Debt, and Money Creation 31

The Dreams of Camelot 34

4 The Spread of the New Gospel 37

Passive Imbalance 38

Built-in Flexibility 40

Hypothetical Budget Balance 41

Monetary Policy and Inflation 42

The Rhetoric and the Reality of the Fifties 43

Fiscal Drag 46

The Reluctant Politician 47

Political Keynesianism: The Tax Cut of 1964 48

Economists, Politicians, and the Public 50

Functional Finance and Hypothetical Budget Balance 51

5 Assessing the Damages 55

The Summary Record 56

Budget Deficits, Monetary Institutions, and Inflation 58

Inflation: Anticipated and Unanticipated 59

Why Worry about Inflation? 61

Inflation, Budget Deficits, and Capital Investment 64

The Bloated Public Sector 69

International Consequences 71

Tragedy, Not Triumph 72

II What Went Wrong?

6 The Presuppositions of Harvey Road 77

The Presuppositions of Harvey Road 78

The Economic Environment of the "General Theory" 81

Strings Can Be Pulled 82

The Great Phillips Trade-off 85

Post-Keynes, Post-Phillips 87

Reform through National Economic Planning 89

7 Keynesian Economics in Democratic Politics 93

Budgetary Management in an Unstable Economy 94

Taxing, Spending, and Political Competition 96

Unbalanced Budgets, Democratic Politics, and Keynesian Biases 98

Deficit Finance and Public Sector Bias 103

8 Money-Financed Deficits and Political Democracy 107

Budget Deficits Financed by Money Creation 108

Benevolent and Independent Monetary Authority 111

The Political Environment of Monetary Policy 114

The American Political Economy, 1976 and Beyond 121

9 Institutional Constraints and Political Choice 125

The Public Economy and the Private 126

Fiscal Perception and Tax Institutions 127

Debt-Financed Budget Deficits 134

Money-Financed Budget Deficits 142

Institutions Matter 144

III What Can Be Done?

10 Alternative Budgetary Rules 147

Budget Balance over the Cycle 148

Built-in Flexibility 149

Budget Balance at Full Employment 151

The Budget Reform Act of 1974 156

Short-Term Politics for Long-Term Objectives 158

11 What about Full Employment? 161

Current Unemployment and the Quandary of Policy 161

The Keynesian Theory of Employment 164

The Inflation-Unemployment Trade-off 166

The Inflation-Unemployment Spiral 168

Biting the Bullet 170

So, What about Full Employment? 171

12 A Return to Fiscal Principle 173

The Thrill Is Gone 173

The Case for Constitutional Norms 175

The Case for Budget Balance 176

Fiscal Decisions under Budget Balance 177

Tax Rates and Spending Rates as Residual Budget Adjustors 178

A Specific Proposal 180

Debt Retirement and Budget Surplus 181.

Notes:

Includes bibliographical references and indexes.

ISBN:

0121388506

OCLC:

2542320