Research On The Evolution Of Western Government Debt Theory

In recent years,various regions and countries around the world have experienced sovereign debt crises of varying degrees,from Iceland to Dubai,from the Eurozone to the United States,from Russia,Asia to Latin America,and have not only caused economic,social and even political turbulence in various countries.At the same time,it also severely damaged market confidence and affected economic development for a long time.Some scholars believe that although there is no possibility of a systemic sovereign debt crisis in China,there is still a hidden danger of a "Chinese-style sovereign debt crisis",that is,the crisis of local government debt problems.The study of government debt economic theory has always been one of the important topics in western economics.Looking at the evolution of world government debt theory,we can find that its theoretical origins can be traced back to the classical school of the 18 th century.With the expansion of kingship,the formation of nationstates,and the development of the monetary economy,the government’s debt and its impact on socio-economic and political issues have aroused widespread concern from all walks of life,and the government’s debt theory has emerged and developed.From the perspective of the history of western economic thought,this article reviews the government debt theory proposed by economics sages,analyzes the development and evolution of debt theory by western economists who have been influential for nearly three hundred years,and tries to expand this research.It provides a broader perspective and deeper understanding of government debt management,and hopes to provide a useful reference for China’s local government debt management reform.The research idea of this article is to study the development and changes of western government debt theories with important influences,sort out the evolution of government debt theories,and analyze,summarize,and evaluate some government debt theories and related economic theories.Explore the clues of mutual influence and mutual guidance of theory and practice,and get inspiration from them,so as to provide some guidance for the practice of local government debt management and risk prevention in China.This article is divided into five chapters,the specific content is as below:The first chapter,the introduction.It puts forward the problems and significance of this paper.Then it summarizes the research at home and abroad,and gives a brief review of the history of government debt.Next,the government debt and budget deficit involved in the article.Several important concepts such as budget surplus,government expenditure,ratio of government debt to GDP,and government debt theory were defined.Finally,the text structure,main innovations and deficiencies of this paper were introduced.The second chapter discusses the government debt theory of classical school,German historical school and Marx.The content includes the classical school representatives Adam Smith,David Ricardo,John Stuart Mill’s view of the government debt theory,and the German historical school economist Carl Ditzer,Lorenz von Stein,Adolf Wagner’s view of government debt theory,And Marx’s point of view,and a brief analysis of some common principles of the theoretical views of classical and German historical school economists.Western economists’ mainstream views on government debt theory differed greatly in the first half and the second half of the 19 th century.In the first half of the 19 th century,the studies and conclusions of classical school economists became popular.Their masterpiece was Adam Smith’s " An Inquiry into the Nature and Causes of the Wealth of Nations." On behalf of the characters,Adam Smith,David Ricardo,Thomas Robert Malthus,John Stuart Muller and others have a negative view on government debt,which is considered to hinder economic growth,however After the Napoleonic Wars,government debt inevitably led to an assessment of the collapse of the national economy that contradicted the fact that the government’s debt,which accounts for nearly 300% of the gross national product(GNP),flourished in its manufacturing,trade and financial industries.Before the First World War,it became a leading country in the world economy.The German historical school public finance economists Carl Ditzer,Carolenz von Stein,Adolf Wagner and others studied the problem of the difference in the implementation of government debt,they realized that public goods and services Productivity increases have a strong reinforcing effect and are not comparable to the private sector.Typical examples are internal and external security,education systems,effective legal and judicial systems,and the ensuing and protection of property rights that follow.In this context,the term “intangible capital” was coined.They suggested that if it was not created and developed(debt),part of the production potential of the national economy would be wasted,and its policy recommendations were adopted by the German authorities,thereby improving The efficiency of the use of German debt financial resources.The above ideas alternately occupy the dominant position and become the main theoretical basis for the formulation of economic policies in the former Keynesian era,and provide the foundation and nutrition for the future government debt theory until the emergence of Keynesian theory.The third chapter discusses Keynesian and Keynesian government debt theory.The neoclassical political economists who dominated the 1870 s to the First World War seldom paid attention to the theory of government debt,because in the past few decades,the world’s largest public debtor(the United Kingdom after 1815)The United States after 1865 successfully dealt with a large amount of war debts,and even reduced the size of debts.The success or failure of government debt management was not significant,so no major attention was paid.Neoclassical economists turned their attention to the theory of marginal utility and the advancement of microeconomics.There is little in the works of its representatives Carl Menger,Walras,William Jevons or Alfred Marshall.A discussion of government debt theory or history.After the 1930 s,Keynesian economics theory represented by Keynes quickly became the mainstream theory of the academic world,and its government debt theory triggered long-term and extensive discussions.The authors found through research that the most extreme arguments that are widely known for the accumulation of permanent deficits and government debt are not from Keynes but from Keynesians.This chapter begins with a critical study of the literature that attempts to interpret Keynesian debt policy,highlighting the inconsistency between Keynes’ s true government debt thinking and the so-called "attribution" of his policy ideas;and then attempts to explain "Keynes" The prevailing view of the public debt policy;it follows the development of the literature that reassessed(interprets)Keynes’ s long-term government debt policy position in accordance with the Memorandum of the Ministry of Finance of 1942-1945 since the early 1980s;By examining Keynes’ s "Ministerial Memorandum of the Ministry of Finance,1942-1945" and other related works,he tried to re-determine Keynes’ core government debt and deficit policy stance and its related characteristics,and finally introduced other Keynesianism that had a greater impact on debt thinking and application decision-making.The debt theory of the people.The global financial crisis has led to a brief interest in Keynes’ s economy and policies.Keynes’ s name is commonly used to describe the policy characteristics of Western developed countries in response to macroeconomic contractions.Well-known Keynesian economic policies are characterized by emphasis on short-term fiscal activism,so the public generally misunderstands that Keynes himself also supports short-term fiscal activities and budget deficits,but by revisiting Keynesian economic policies on government spending,public debt,and budget deficits.It is suggested that this is not the actual policy position of Keynes himself.On the contrary,Keynes himself does not support the temporary,discretionary debt financing fiscal policy.The relevant literature indicates that Keynes advocates long-term policy of full employment through the expansion of public investment plans.Permanently expanding the public sector to maintain full employment and prevent macroeconomic volatility,Keynes’ s attitude toward government debt financing spending is cautious,and he opposes the general budget deficit,for Keynes,during the recession(depending on debt financing)Public spending is only the second best expedient.The fourth chapter discusses the theoretical study of government debt in the Public choice theory.This chapter first introduces the public debt theory of several pioneers of the Public choice theory,and then highlights Buchanan’s economic theory on government debt,and according to the incidence of debt and debt mentioned in Buchanan’s work.Economic consequences,Ricardo’s equivalence,Keynesian macroeconomics,the persistence of debt,the moral consequences of debt,and the idea of balancing the budget bill;and then based on Buchanan’s view of government debt theory,the constitutional economy of government debt The analysis of the government and the theoretical analysis of government debt under the framework of intergovernmental competition;finally,it briefly introduces the theory of western modern government debt theory such as tax smoothing theory,optimal debt theory and earnings policy,and political budget cycle theory.The fifth chapter mainly discusses the enlightenment of western government debt theory to local government debt management in China.First analyzed the debt situation of Chinese government and local government(financing platform),and summarized some theoretical viewpoints related to Chinese local government debt;analyzed the existing problems of Chinese local government(financing platform)debt,and proposed related theories based on western government debt theory policy suggestion.China’s debt problem has the same background as the Western countries,but it has its differences.It is China’s aim to deal with the negative impact of the global financial crisis.After several rounds of stimulus measures have been implemented,the local government Accumulation of excessive investment in facilities and excess capacity.Based on the previous analysis,this article comprehensively studies the three western government debt theories,extracts the essence,tries to find a solution to the local government debt problem in China,and proposes that fiscal and debt restructuring is urgent and that government borrowing funds must be invested in high levels.For efficiency and high-efficiency projects,policy recommendations such as transparency of government debt and public participation should be improved.