Macroeconomics, Fiscal Policy, and Public Debt: Conflating Myth and Reality

54 Pages Posted: 31 Oct 2016

See all articles by Giuseppe Eusepi

Giuseppe Eusepi

Sapienza University of Rome

Richard E. Wagner

George Mason University - Department of Economics

Date Written: October 30, 2016

Abstract

This is the first of six chapters of the penultimate draft of a book titled Public Debt: An Illusion of Democratic Political Economy. The book’s theme is an elaboration and refinement of the early 20th century orientation toward public debt that Antonio de Viti de Marco set forth. As the book’s title asserts, public debt is a misnomer for a democratic scheme of political economy. To declare a democratic polity to be indebted is akin to observing a grin without a cat, to recall Dennis Robertson view of Keynes’s liquidity preference theory. While the entire book develops this claim, this chapter explains how standard macro theories of various types are more myth than reality, and with the mythology obscuring the realities of the domination-subordination relationships that suffuse democratic regimes. To provide an overview of the rest of the book, this essay ends with the book’s Preface.

Keywords: Antonio de Viti de Marco; monopolistic democracy; Ricardian equivalence; deconstructing democratic debt; economic manipulation for political gain

JEL Classification: D72, E30, E62, H62

Suggested Citation

Eusepi, Giuseppe and Wagner, Richard E., Macroeconomics, Fiscal Policy, and Public Debt: Conflating Myth and Reality (October 30, 2016). GMU Working Paper in Economics No. 16-42. Available at SSRN: https://ssrn.com/abstract=2861647 or http://dx.doi.org/10.2139/ssrn.2861647

Giuseppe Eusepi

Sapienza University of Rome ( email )

Via del Castro Laurenziano, 9
Rome, RM 00161
Italy
+39 06 49766955 (Phone)

Richard E. Wagner (Contact Author)

George Mason University - Department of Economics ( email )

4400 University Drive
334 Enterprise Hall
Fairfax, VA 22030
United States
(703) 993-1132 (Phone)

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