Public Principles of Public Debt: A Defense and Restatement

by James M. Buchanan

Public Principles of Public Debt is one of James M. Buchanan’s most important and influential books. The radical idea he conceived was that our reliance on public debt has amassed a sort of orthodoxy that is commonly―and needlessly―assumed by taxpayers, by politicians, and by economists themselves. Buchanan dismisses the nearly universal belief (which continues to this day) that the burden of debt is borne by the current generation, and he argues persuasively that public debt is shouldered in large part by generations still to come. Written in 1958, this book represents Buchanan’s first published monograph, and its publication met with much controversy, confusion, and speculation in the economic community. But the book also added to Buchanan’s rising stature in the early part of his career as a brilliant and original thinker. The arguments Buchanan lays out in this book had a considerable impact on much of his later work. Buchanan’s object here is to establish a set of analytical claims about debt incidence. Current anxieties over implicit Social Security debt are clear indications of the rightness of Buchanan’s then-revolutionary theory. James M. Buchanan (1919–2013) was an eminent economist who won the Alfred Nobel Memorial Prize in Economic Sciences in 1986 and was considered one of the greatest scholars of liberty in the twentieth century.

Genres: Economics

190 pages, Paperback

First published August 1, 1999

About the author

American economist known for his work on public choice theory, for which in 1986 he received the Nobel Memorial Prize. Buchanan's work initiated research on how politicians' self-interest and non-economic forces affect government economic policy. He was a Member of the Board of Advisors of The Independent Institute, a Distinguished Senior Fellow of the Cato Institute, and professor at George Mason University.
Buchanan was the founder of a new Virginia school of political economy. He taught at the University of Virginia—where he founded the Thomas Jefferson Center for the Protection of Free Expression—UCLA, Florida State University, the University of Tennessee, and the Virginia Polytechnic Institute, where he founded the Center for the Study of Public Choice (CSPC). In 1983 a conflict with Economics Department head Daniel M. Orr came to a head and Buchanan took the CSPC to its new home at George Mason University. In 1988 Buchanan returned to Hawaii for the first time since the War and gave a series of lectures later published by the University Press. In 2001 Buchanan received an honorary doctoral degree from Universidad Francisco Marroquín, in Guatemala City, Guatemala, for his contribution to economics.

Reviews

[Didier "Dirac Ghost" Gaulin · Rating 4 out of 5]

Buchanan lay down the analytic frame work in which one may be able to determine the range onto which state's government should be allowed to leverage taxation dollars and generate public debt. The author, as usual, offers a complete system, beginning with the ideologies of the governmental planners which leads either to augmentation or reduction of public bonds purchase (or their repurchase), the different economic frame works and their views, how one should think about when determining between raising taxes, raising debt or using central banking liquidity programs, by juxtaposing the different options with their real consequences in the political economy that those decisions may have. An essential set of ideas that is rarely present in the welfare economics spaces --somehow, I do not wonder why..