Full text: Some Comments on the Politics of Full Employment.

required to maintain full employment he no doubt tacitly assumed 
that interest rates would be kept low. If the euthanasia of the 
rentier would be achieved i.e. the interest rate kept at the rate 
of inflation then the servicing of the public debt would not 
constitute a problem at all (except perhaps in so far as different 
groups might be affected in different ways by inflation).A 
positive real rate of interest may of course be tolerable if there 
is a sufficient growth of the national product. If the interest 
rate is substantial in relation to the growth rate, then the 
situation is likely to lead to a continuing increase in the public 
Kalecki had proposed a tax on all wealth in order to service the 
debt.Since all capitalists would pay but only the rentiers would 
receive the yield of the tax this involves a shift of income from 
entrepreneurs to rentiers,which is not a very happy implication. A 
steadily growing public debt in this case implies a growth of the 
rentier income and of the number of people interested in it.In 
view of the large propensity to save of this class this growth 
will tend to be self reinforcing.Politically this means that a 
growing rentier class allied to an expanding financial sector will 
see to it that high interest is maintained and no experiments in 
expansion are entertained. Economically it means that there result 
automatically continuing additions to the budget deficit which do 
not benefit effective demand. 
Paradoxically enough (or so it seems) the large budget deficits of 
the last decades have not been the result of Keynesian-Kaleckian 
policies at all. Quite the opposite. When the end of the Keynesian 
era was officially declared in 1974/75 budgets everywhere turned 
very largely into deficit and they sky rocketed after Reagan took 
over. The explanation is not difficult: After 1974 the personal

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