The Politics of Budgetary Surplus
This book probes the hollow rhetoric of debt, deficits and austerity. It explores the decisions of parties of the left which have attempted to deflect criticisms of economic mismanagement and gain trust by depoliticising the budget process and financial m
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Scott Brenton
The Politics of Budgetary Surplus
Scott Brenton
The Politics of Budgetary Surplus
Scott Brenton University of Melbourne Australia
ISBN 978-1-137-58596-7 ISBN 978-1-137-58597-4 DOI 10.1057/978-1-137-58597-4
(eBook)
Library of Congress Control Number: 2016955055 © The Editor(s) (if applicable) and The Author(s) 2016 The author(s) has/have asserted their right(s) to be identified as the author(s) of this work in accordance with the Copyright, Designs and Patents Act 1988. This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. Cover image © Mark Bourdillon / Alamy Stock Photo Printed on acid-free paper This Palgrave Macmillan imprint is published by Springer Nature The registered company is Macmillan Publishers Ltd. London
PROLOGUE
The purpose of this book is not to suggest that budget surpluses or even fiscal rules are bad or that countries should not be concerned with debt and deficits. Rather it is to show that there are other agendas at work and the consequences are not entirely positive. In comparing centre-right and centre-left governments, the intention is not to show that centre-left governments have been better (they have not in many respects), but rather that centre-right governments rarely match their own rhetoric. The final ‘not’ is that this book is a work of political science, and not economics, and hence can be found in the non-fiction section. To get some basic economic ideas out of the way, since the 1980s, the primary instrument of demand management in most countries became monetary policy focused on price stability, supported by fiscal policy with unconstrained automatic stabilisers (fluctuating tax and spending elements). Throughout the 1990s, central banks gained operational independence to set interest rates to try and control the money supply and influence inflation. Monetary policy was assumed to have a lower bound, although there are now negative interest rates. Fiscal sustainability is synonymous with ‘solvency
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