Debt, Debt And More Debt: Is Democracy To Blame?
Above: The marble statue of Plato stands in front of the Athens Academy in Athens. The ancient Greek philosopher had his doubts about democracy.
17 July | High-profile experts [staged] two separate Washington press conferences [last] Tuesday to demand action on public-debt problems. One group [targeted] state budget crises; the other, the federal budget mess.
If the ancient Greek philosopher Plato were still alive, he might hold a third press conference to declare: “It’s hopeless. I told you so. Democracy will always degenerate into chaos because people will vote for their immediate self interests, not the long-term good.”
At a time when nearly every major democracy in the world is facing a debt crisis, some people are wondering: Might Plato be right? …
A debt crisis is dragging Europe — and maybe the whole global economy — into recession …
Debt is not just a Western problem. For example, in Japan the debt load is more than double the size of the country’s entire gross domestic product.
What’s going on? Can’t self-governing people govern?
Plato may have gotten there first, but many people have followed up, asking just that question. Back in 1978, Auburn University professor Robert Ekelund co-authored a paper entitled “Deficits and Democracy.”
His historical research, done along with W. Mark Crain, also a professor, found that all over the world, no matter what the culture or continent, “democratic governments have exhibited tendencies to run perennial budgetary deficits.”
That’s because the people who win elections often are those who promise what voters would like: lower taxes or more public services, such as better roads and more police. Once in office, a lawmaker discovers that “in financing the desired output of the public sector, the politician [must choose between] raising taxes versus borrowing funds,” the professors wrote.
The easier choice is to borrow and pass the cost to a future generation that does not yet vote, the paper said …
Read Whole: NPR