In Defense of Public Debt

Discussions of sovereign debt are always the same, yet always different. Why debt finance? How much can we borrow? Should creditors worry? The authors take us on a fascinating 2500-year tour of sovereign debt through the ages, the discussions, the successes and the failures. The bottom line: Well-used, debt finance has been and is precious. The latest example: The use of debt during the Covid crisis. A must read for anybody interested in current debt debates. * Olivier Blanchard, Professor of Economics Emeritus, MIT, and Senior Fellow, Peterson Institute for International Economics * An exceptionally comprehensive and readable history of public debt from ancient Greece to modern Greece and from Argentina to Australia to Asia to America. This book is rich with detail, studded with lessons learned, forgotten and learned again, and packed with analytical perspective that reflects decades of scholarship. It is a timely reminder to governments, lenders, investors and ordinary citizens that if you don't know where you've been, you probably don't know where you are going. * David Wessel, Director, Hutchins Center on Fiscal and Monetary Policy, Brookings Institution * Repeatedly since the 1980s, Americans have been told to worry about the size of the federal debt. And yet the debt has continued to grow absolutely and as a share of gross domestic product, with few of the predicted adverse consequences. Building expertly on large and complex literatures in history, economics and political science, In Defense of Public Debt offers a balanced account of the positive and negative aspects of public debt, showing the vitally important role government borrowing can play in a time of crisis, but also the very real problems that can arise when debts grow too large. At a time when too many policymakers subscribe to naive ideas about public finance, this is a book that cries out for a readership beyond the academy. * Niall Ferguson, Milbank Family Senior Fellow, Hoover Institution, Stanford * For a typical citizen, protection in war-time or in a pandemic reveals their government to be a problem-solver rather than 'the problem.' Yet the legacy of such episodes in the accumulated national debt is widely misunderstood, opening the way to too rapid a turn to austerity. In Defense of Public Debt provides enlightenment and reassurance by inviting the reader to follow how public debt-warts and all-has helped create the modern world. * Wendy Carlin, Professor of Economics, University College London * In Defense of Public Debt could not be timelier. It is an engaging and informative account of the use and misuse of government borrowing, from early times to the Covid pandemic. The unquestionable expertise of the authors, and their non-partisan reading of the evidence from our past, will serve to guide the intelligent reader as they wrestle with one of the most important issues of our time: Are we borrowing too much? * Raghuram Rajan, Professor of Finance, University of Chicago * How much debt should a country accumulate during a crisis? And afterwards? To know what works and what doesn't requires verdicts on past performances. The authors deliver the verdicts, applying sound principles in a definitive global history of public debt. * Peter H. Lindert, Distinguished Professor of Economics (Emeritus), University of California - Davis * With so much nonsense about the public debt in the air, it is refreshing to discover a work of such intelligence, balance, and erudition. Read In Defense of Public Debt for fun and profit. Then send an excerpt or two to your favorite politicians. * Alan S. Blinder, Gordon S. Rentschler Memorial Professor of Economics and Public Affairs, Princeton University * In this fascinating and comprehensive history, the authors provide a much-needed antidote to the simplistic accounts that so often dominate debates about government debt. From its earliest origins to today, public borrowing has sometimes led to spectacular failures, but it has also allowed societies to achieve objectives that would have been impossible in its absence. As we ask where we stand with public debt today, there is no better book to remind us of the lessons of history. * David Stasavage, Julius Silver Professor of Politics, New York University *