John F. Weeks - The Debt Delusion

1 Cover

2 Front Matter The Debt Delusion Living Within Our Means and Other Fallacies John F. Weeks polity

3 Introduction: Debt, Deficits and AusterityA Citizen’s Guide Austerity Politics Austerity in Practice Austerity Politics and Reality

4 1 We Must Live Within Our MeansThe Myth Itself What Are Our Means? How Governments Borrow Public Sector Auto-Finance From Myth to Reality

5 2 Governments Must Balance Their BooksThe Myth Itself Budget Uncertainty Why Do Governments Tax? From Myth to Reality

6 3 We Must Tighten Our BeltsThe Myth Itself The Affordability Fallacy Social Protection and Equity From Myth to Reality

7 4 Never Go into DebtThe Myth Itself Why Debt Accumulates Debt and the Economic Cycle Myth and Reality

8 5 Taxes Are a BurdenThe Myth Itself The Eponymous Taxpayer Taxes in the Concrete From Myth to Reality

9 6 Austerity: There is No AlternativeThe Myth Itself Public Debt Disasters Euro Debt Crisis and the TINA Principle Fear of Deficits and Inflation From Myth to Reality

10 7 Always an Alternative Decommissioning Exchange Rates Decommissioning Monetary Policy Decommissioning Fiscal Policy There is an Alternative: Democracy

11 Index

12 End User License Agreement

1 Chapter 5 Table 5.1Distribution of central government expenditures, Germany, United Kingdom and Uni…

1 Introduction Figure 0.1Public revenue minus spending for the United States, 1950–2018, percentage of gr… Figure 0.2Public revenue minus spending for the United Kingdom, 1950–2017, percentage of g… Figure 0.3Index of total public expenditure, United Kingdom and United States, 2000–2017 Figure 0.4Index of total public expenditure, four major eurozone countries, 2000–2017 Figure 0.5Index of total public expenditure, three austerity-implementing eurozone countri…

2 Chapter 2 Figure 2.1Balancing a simple economy that has one part Figure 2.2Balancing a more complete economy that has two parts Figure 2.3Balancing a complete three-part economy Figure 2.4Automatic stabilization of the UK economy, public and private lending/borrowing,… Figure 2.5Managing the economy into the Goldilocks Zone

3 Chapter 3 Figure 3.1Public pension payments in six high-income countries, 1991–2013 Figure 3.2Ratio of disposable income to original income, United Kingdom and United States,… Figure 3.3Ratio of disposable income and final income to original income, United Kingdom, …

4 Chapter 4 Figure 4.1Household income, expenditure and debt Figure 4.2“Delinquent” loans of US commercial banks by type, 1998–2017 Figure 4.3United States: federal, non-financial corporate, and household debt as share of … Figure 4.4United Kingdom: federal, nonfinancial corporate, and household debt as share of … Figure 4.5Germany: all government, nonfinancial corporate, and household debt as a share o… Figure 4.6Governments grow out of debt: debt to GDP ratio for the United Kingdom and the U…

5 Chapter 5 Figure 5.1Per capita income and per capita tax for twenty countries, all levels of governm… Figure 5.2Government taxes on US, UK and German households by income quintile, mid-2010s Figure 5.3Percentage distribution of tax revenue by type, EU, Germany, UK and US, 2015 Figure 5.4Distribution of the US federal government debt, 2017 Figure 5.5Distribution of the UK government gross debt, 2017

6 Chapter 6 Figure 6.1Value of debt defaults, 1980–2016 Figure 6.2Interest rates on long-term public bonds, seven eurozone countries and the UK, 2… Figure 6.3Two components of the US consumer price index, 2000–2017 Figure 6.4Two components of the UK consumer price index, 2000–2017

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2 Table of Contents

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“Analytically brilliant; crystal clear writing; forensic in its investigation; entertaining and erudite. If you want to know what the alternative to austerity is, there is no better guide.”

Danny Dorling, University of Oxford

“John Weeks is one of the most incisive critics of austerity policy. In this book he shows, in clear, non-technical language, how the mythology of ‘balancing the books’ has subverted public understanding of the social and economic purpose of state budgets, allowing governments to inflict serious, unnecessary and possibly lasting damage on ordinary citizens.”

Lord Robert Skidelsky, Warwick University and the British Academy