Rögnvaldur Hannesson, Debt, Democracy and the Welfare State: Are Modern Democracies Living on Borrewed Time and Money

Abstract

Abstract. This book deals with the accumulation of government debt in twenty-two of the richest countries of the world, which has been ongoing since about the mid-1970s. All these countries are welfare states with a large government sector that provides services and transfers purchasing power to the perceived needy, although some countries are more ambitious in this respect than others. The build-up of debt is due to maintaining welfare expenditures beyond what tax revenues allow. But indefinite debt accumulation is not an option. The question is whether the governing elites in democratic countries will shrink from doing what is necessary in fear of losing their electorate, in the end opening the way to unenlightened populists and potential usurpers.

Keywords. Dept, Democracy, Welfare State.

JEL. D60, F34, I30, H60, P00.