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Budget Deficits and Constitutional Constraints
Abstract disponibile solo in lingua inglese
According to the author, the possibility of running a budget deficit makes government growth easier. Such an argument is illustrated by the spectacular increase in public sector spending and revenue in Italy in the past 25 years. Budget deficits hide the cost of government from those who bear it and spread it over a large number of taxpayers. Furthermore, budget deficits give politicians the impression that they can postpone the payment, so that the credit for the spending decision goes to the present government, while its cost appears to be borne by some future government. The paradox is that Italy has an admirable Fiscal Constitution which was intended to prevent such an outcome. As long as it was enforced, the growth of the deficit was contained. But as soon as the Keynesian orthodoxy became prevalent, the principle of the last paragraph of article 81 of the Constitution was abandoned, and the deficit exploded. Hence, the author's conclusion that there is no foolproof legal device that can protect our freedom forever, there is no substitute for our constant alertness to the dangers posed by an ever-growing Leviathan.