ABSTRACT
We had the opportunity to meet with Frederic Lee on various academic occasions and his wit and provocative enthusiasm always invigorated us. His relentless message that we should not give up using our full capacities to improve the lives of many and his consistent example shall be with us vividly, as we intend to show in this chapter. We have experienced the aggravation in the lives of many whenever the idea of ‘sound finance’ is put into action. It is our responsibility, thus, to scrutinize it. Sound finance economists and politicians proclaim that fiscal austerity gives confidence to financial markets and allows governments to pay lower interest rates on their debts. This arguably leads to a safer environment for investments as the reduction in inefficient government spending gives room to efficient private spending. As a result, it is said, production and employment increase. In order to legitimate their view and to gain social assent, those economists and politicians use analogical reasoning to claim that managing the central government’s budget is like managing the household finances.
