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
Date Written: June 9, 2011
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: Suggested Citation