The Debt Delusion. John F. Weeks

Introduction: Debt, Deficits and Austerity

       A Citizen’s Guide

      In the second stanza of Lewis Carroll’s The Hunting of the Snark, the Bellman tells the rest of the ship’s crew, “I have said it thrice: What I tell you three times is true.” This propaganda technique of repetition establishes familiarity then credibility even to obvious contractions of reality. The austerity narrative – governments should spend no more than their tax incomes – provides powerful proof of the effectiveness of repletion to give myth credibility.

Central to the general acceptance of myths about government budgets is lack of basic understanding by citizens of public spending and taxation. Lack of understanding becomes misunderstanding under the assault of propaganda and provides fertile soil for converting myth into conventional wisdom (a term coined with analytical insight by the US economist and diplomat John Kenneth Galbraith). Knowledge provides the tool to expose myths as the non-credible parables they are, to reveal conventional wisdom as myth no matter how frequent the repetition.

      Informed citizens provide the foundation of democratic society. Participating through democratic institutions, we the citizens facilitate effective government. Understanding government finances is central to that participation. Participation creates engagement, so that the citizen becomes the active subject of policy discussion rather than the passive object.

      Ill-informed citizens fall prey to cynicism that undermines democratic participation by inducing alienated passivity. Through fostering the ignorance that generates cynicism, governments can rule on behalf of the special interests rather than for the general welfare. Governments serving the few neutralize and undermine democracy, claiming to bring order and stability to replace disorder and disarray – disorder and disarray typically generated by their special interest policies.

      In both Europe and the United States, few public issues are as consistently misrepresented as government budgets. The misrepresentation facilitates policies that undermine rather than enhance the public welfare. To defend special interests, governments use these misrepresentations to justify policies that weaken the ability of the public to participate as citizens. Central to that weakening is the superficially reasonable proposition that, complex as it is, public finance should be left to experts. The final chapter of this book inspects this proposition and rejects it.

Misrepresentation and bogus appeal to experts distort public debate on how much governments should spend, how that spending should be funded, and who should benefit. As a result, a very large part of public discussion over government spending and tax does not inform. It misinforms and leaves citizens knowing less, not more, accepting myths as if they were common sense. Polemics marshal the language of myth to combat the wisdom and insight that facilitate democratic decision making.

      A substantial part of the public hesitates from engaging in discussion of government budgets because of an imagined lack of expertise. Citizens retreat from what they believe is a complex subject, offering the plea “I am not an economist,” and “Economics is too dull and difficult to try to understand.” These laments result from the inculcation of misinformation through extensive and pervasive propaganda. Public-sector spending and taxation are overwhelmingly about politics and only secondarily about economics. Yet many politicians and much of the media discuss public finances as if the reverse were the case. Debates over political priorities are too frequently treated as if they were a technical matter for experts. The need for expertise in a democratic society is important and its role is clear – experts advise, politicians decide, and citizens elect.

      This book takes the reader past superficial rhetoric for a straightforward discussion of “fiscal policy” – public spending, taxation, the balance between the two (“surpluses” and “deficits”), and the concrete function of all three. Reading this book requires no economic knowledge. I taught economics for over forty years, spending as much time dispelling the misleading conventional wisdom of the profession as I did presenting how economies actually work.

My commitment to non-technical language might appropriately begin with a bit on “jargon-busting” on budget language. The word “fiscal” has its origin in the Latin word fiscus, meaning a bag, basket or purse for holding money. The word came to mean the Roman state treasury. Thus, “fiscal policy” has a simple meaning: management of the public purse.

      With jargon banished, readers following my explanations require only the commitment to think logically and to link logic to what we observe, attributes common to all citizens. There is no mathematics here, and the arithmetic hardly goes beyond adding and subtracting. A problem we repeatedly face is that the words used in debates over public spending

Скачать книгу