Finanse publiczne – lekcja historii
Public finances – A Historical Perspective

Summary/Abstract: A very bad state of public finances of majority of economically developed countries is largely the result of specific government policies and excessive development of the welfare state in the twentieth century, especially after World War II. This paper attempts to answer two questions: Can we point out some fundamental reasons for the current miserable situation of the public finances? What kind of actions ought be undertaken to overcome this miserable situation? The paper starts with reflections on the history of state indebtedness in the UK over the last 300 years, and in the United States over the last 200 years. The next section presents a proposed response to the question of how big should the government be to provide smooth, harmonious and relatively quick economic and social development. The final part of the paper presents a comparative analysis of government size and economic development of the USA and the Great Britain in the nineteenth and twentieth centuries.

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