ABSTRACT
This chapter focuses on the historical reconfiguration of the public finances over the last forty years, focusing on the shift during that period from post-war Keynesian state interventionism to the neoliberal hegemony that characterises the current economic policy landscape across the world. It examines the contemporary debates over public sector deficits and sovereign debt, arguing that because of the global savings glut that has persisted right through the crisis that began in 2007, it is not 'economically necessary' to give immediate priority to cutting public deficits and debts. The chapter suggests that the real reason for the cuts is twofold. The business, financial and political elites, in short, the ruling classes were obliged in 2008 to summon the interventionist state back onto the stage to avoid a total collapse of global finance.
