The Costs and Risks of Excessive Debt: Comment on Ádám Török

Wirtschaftspolitische Blätter, Vol. 58, No. 1, pp. 75-79, 2011

Posted: 20 Jun 2011 Last revised: 28 May 2017

See all articles by Heinz Handler

Heinz Handler

Austrian Institute of Economic Research (WIFO); Vienna University of Technology - Institute of Statistics and Mathematical Methods in Economics, Research Group Economics (ECON); Austrian Federal Chancellery - Verwaltungsakademie des Bundes

Date Written: June 9, 2011

Abstract

Ádám Török has presented a thorough analysis of the problems associated with excessive public debt, focusing on the position of Eastern countries with special emphasis on Hungary. Recent experiences with debt problems in euro countries corroborate Török's position that a, "100 per cent plus," debt level puts a country in an extremely risky position. "Fiscal alcoholism," associated with the influence of the political cycle on fiscal policy, needs to be frustrated, perhaps by some independent institutional actor who should be well suited to provide transparency and keep data, forecasts and other ex ante analyses as well as ex post evaluations well beyond dispute. However, decision making per se and accountability vis-à-vis the general public should remain with elected politicians.

Keywords: Excessive public debt, fiscal councils, Euro countries, Hungary

JEL Classification: H61, H63

Suggested Citation

Handler, Heinz J., The Costs and Risks of Excessive Debt: Comment on Ádám Török (June 9, 2011). Wirtschaftspolitische Blätter, Vol. 58, No. 1, pp. 75-79, 2011, Available at SSRN: https://ssrn.com/abstract=1861550

Heinz J. Handler (Contact Author)

Austrian Institute of Economic Research (WIFO) ( email )

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Vienna University of Technology - Institute of Statistics and Mathematical Methods in Economics, Research Group Economics (ECON) ( email )

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HOME PAGE: http://www.econ.tuwien.ac.at

Austrian Federal Chancellery - Verwaltungsakademie des Bundes ( email )

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Austria

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