Buchanan and the writing of Public Principles of Public Debt

This article examines how James Buchanan came to write Public Principles of Public Debt, his first sole-authored book. We explore the evolution of Buchanan’s views on public debt, particularly his rejection of the three central propositions of what he called the “new orthodoxy.” We show how he initially recognized the significance of Ricardian equivalence (the relationship between taxes and loans), later rejected it, and ultimately criticized the analogy between private and public debt. Our analysis draws on a draft paper titled “Taxes versus Loans. Variations on a Ricardian Theme,” tracing Buchanan’s gradual intellectual development and the factors that influenced his theory of public debt. This study not only clarifies Buchanan’s thinking process but also sheds light on the formation of Public Principles of Public Debt, contributing to a better understanding of its economic content.

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