What We Owe: Truths, Myths, and Lies About Public Debt

Cottarelli, who once headed the Fiscal Affairs Department of the International Monetary Fund, has put together a primer on public debt, primarily in relatively rich countries. He sets out to debunk a number of common misconceptions about government borrowing, especially the idea that unless a government pays off its debts, it is fiscally unsound or is somehow cheating future generations. He draws on extensive scholarly research about debt, much of it carried out by IMF staff, and presents his findings in comprehensible, nontechnical language. The book reports on how high public debt (relative to GDP) must be, and under what circumstances, before it becomes a drag on economic growth. Cottarelli also includes an informative discussion of the various ways to reduce the burden of public debt, along with their often painful side effects, focusing on Greece and his native Italy. This is essential reading for all those concerned about current high levels of public debt—and for those who are not concerned but should be.