Channels, Spring 2018

Channels • 2018 • Volume 2 • Number 2 Page 33 generation and the next, just as Lerner and Barro over-aggregate by ignoring individuals and focusing on national accounting. In this presentation, Buchanan’s work began to be considered one thought among many equally valid ideas contributed over a long history of the debate over public debt. His unique integration of Public Choice became less visible as a result of the attempt to synthesize and modernize more technical questions associated with public debt theory. Indeed, the authors of this particular article ultimately take positions that are at odds with Buchanan’s fundamental arguments. They state “‘we must owe debt to ‘ourselves’ and that Ricardian equivalence must hold.” 109 While their article’s title suggests a focus on reconciliation among the three schools of Barro, Buchanan, and Lerner-Keynes, their conclusion’s acceptance of the presuppositions of only two groups suggests a severe disadvantage for Buchanan in their presentation. The article’s unique contribution, using a model of the political process to suggest that debt finance amounts to transfers among present taxpayers according to their intergenerational altruism, seems closest to Buchanan in its orientation for policy. Nevertheless, as the authors’ focused on the fundamentals of the debt debate and their conclusion favored the other schools and used Barro’s model explicitly, this would signal a turn toward such modeling and fundamentals in the field as a whole. Analysis of Current Literature The pro-Barro modelling of the article by Vaughn and Wagner effectively foreshadowed what is seen in the field of public debt analysis today, which a review of a sample of modern articles in this field will suggest. The use of Barro’s assumptions and modelling principles predominates, generating a focus on mathematics rather than human behavior. The conclusions vary, but the work resembles the Keynesian and Ricardian approaches far more than it does Buchanan’s Public Principles of Public Debt. One example of such an article is “Impact of Public Debt on Economic Growth: Evidence from Indian States.” The paper begins with an evident grounding in the generally Keynesian ideas that Buchanan critiqued, citing Paul Krugman and dividing debt categorically into the external and internal categories that the new orthodoxy of Buchanan’s day emphasized. 110 But, perhaps more importantly, the overall assessment of the literature as to the various schools, hypotheses, and conclusions formulated regarding the theoretical framework of public debt is inconclusive. 111 The authors do not find a particular viewpoint determinative for their own work. The theoretical framework that Dr. Mohanty and Dr. Mishra do provide contains a restatement of the Keynesian perspective and the Ricardian Equivalence ideas of the Classical School, represented primarily by Barro. Completing this background, the paper 109 Ibid, 46. 110 Asit Ranjan Mohanty, Bibhuti Ranjan Mishra, “Impact of Public Debt on Economic Growth: Evidence from Indian States,” Vilakshan, XIMB Journal of Management , Vol.13 (2), (September, 2016), 1-2. 111 Ibid, 1-2.