Aidan Regan: Public debt is not a moral failure, it is an investment in the future

The EU’s fiscal rules are not fit for purpose, and Europe must break out of the mindset of a balanced budget as the ultimate goal and utilise debt to its advantage

5th June, 2021
Aidan Regan: Public debt is not a moral failure, it is an investment in the future
‘What Europe needs is a new forward-thinking consensus that sees the benefits of public debt, while recognising the costs of balanced budgets.’ Picture: Geert Vanden Wijngaert/Bloomberg

The biggest threat to the future of economic prosperity in Ireland and Europe is a return to the old fiscal orthodoxies. These conservative orthodoxies worry about inflation, call for public debt reduction, and demand balanced budgets.

Not only are they bad economic ideas – founded on poor and weak empirical evidence– they are dangerous economic ideas that lead to social destabilisation and political conflict. What Ireland and Europe need is a new fiscal consensus that...

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