If public spending can be reinterpreted as public investment. Can public debt be reinterpreted as public asset?

Morgan, Robert (2021): If public spending can be reinterpreted as public investment. Can public debt be reinterpreted as public asset?

Abstract

Since the Great Financial Crash (GFC) of 2008, there has been a great deal of soul searching and hand wringing when it comes to public debt. This collective anxiety over the national debt, government debt or public spending debt or whatever you choose to call it, all comes down to the same thing. The basic idea is that the government is broke, we are out of money and that cuts to benefits and public services, are not only desirable but necessary. Despite the fact that what started as aprivate sector crisis which saw the private banking sector being bailed out with billions of pounds in public money to avoid collapse, both politicians and economists rebranded this same crisis as a crisis of public spending. By any measure is a clever piece of sleight of hand worthy of any great magician. However this does raise the question, is this true? Do the poorest and most vulnerable in UK society, have to suffer for the actions of the very richest playing fast and loose with the economy? Can it be true that because a huge amount of public money has been given to secure the private profits of the banks, those at the bottom of society have to go without? In effect, are we saying that because the UK government has spent all its money on the richest in society, the government has nothing left for the poorest?

• Item Type: MPRA Paper
• Language: English
• Keywords: Government finances, Modern Monetary Theory, Great Financial Crash, seigniorage, Kelton, Mosler, Mitchell,
• Subjects: H - Public Economics > H0 - General > H00 - General; H - Public Economics > H5 - National Government Expenditures and Related Policies > H50 - General

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