The ad nauseam repeated claim that our public debt is excessive and that we have to balance the public budget is nothing but absolute nonsense. The harder politicians - usually on the advice of mainstream establishment economists - try to achieve balanced budgets for the public sector, the less likely they are to succeed in their endeavor.

And the more the citizens have to pay for the concomitant austerity policies these wrong-headed politicians and economists recommend as ‘the sole solution.’

Public debt is normally nothing to fear, especially if it is financed within the country itself (but even foreign loans can be beneficent for the economy if invested in the right way). Some members of society hold bonds and earn interest on them, while others pay taxes that ultimately pay the interest on the debt. The debt is not a net burden for society as a whole since the debt ‘cancels’ itself out between the two groups. If the state issues bonds at a low-interest rate, unemployment can be reduced without necessarily resulting in strong inflationary pressure. And the inter-generational burden is also not a real burden since - if used in a suitable way - the debt, through its effects on investments and employment, actually makes future generations net winners. There can, of course, be unwanted negative distributional side effects for the future generation, but that is mostly a minor problem since when our children and grandchildren ‘repay’ the public debt these payments will be made to our children and grandchildren.

To both Keynes and Lerner - as to today’s MMTers - it was evident that the state has the ability to promote full employment and a stable price level - and that it should use its powers to do so. If that means that it has to take on debt and underbalance its budget - so let it be! Public debt is neither good nor bad. It is a means to achieve two over-arching macroeconomic goals - full employment and price stability. What is sacred is not to have a balanced budget or running down public debt per se, regardless of the effects on the macroeconomic goals. If ‘sound finance,’ austerity and balanced budgets means increased unemployment and destabilizing prices, they have to be abandoned.

William Vickery was winner of the 1996 Nobel Prize in Economics. From Wikipedia:

William Spencer Vickrey (21 June 1914 - 11 October 1996) was a Canadian-American professor of economics and Nobel Laureate. Vickrey was awarded the 1996 Nobel Memorial Prize in Economic Sciences with James Mirrlees for their research into the economic theory of incentives under asymmetric information, becoming the only Nobel laureate born in British Columbia.

The announcement of his Nobel Prize was made just three days prior to his death. Vickrey died while traveling to a conference of Georgist academics that he helped found and never missed once in 20 years.[1][2] His Columbia University economics department colleague C. Lowell Harriss accepted the posthumous prize on his behalf. There are only three other cases where a Nobel Prize has been presented posthumously.

William Vickrey wrote in 1993:

We are not going to get out of the economic doldrums as long as we continue to be obsessed with the unreasoned ideological goal of reducing the so-called deficit. The ‘deficit’ is not an economic sin but an economic necessity …

We have the resources in terms of idle manpower and idle plants to do so much, while the preachers of austerity, most of whom are in little danger of themselves suffering any serious consequences, keep telling us to tighten our belts and refrain from using the resources that lay idle all around us.

Alexander Hamilton once wrote “A national debt, if it be not excessive, would be for us a national treasure." William Jennings Bryan used to declaim, “You shall not crucify mankind upon a cross of gold." Today’s cross is not made of gold, but is concocted of a web of obfuscatory financial rectitude from which human values have been expunged.