Rethinking Public Money and Taxpayers' Money.

I have written before about the perennial dichotomy that permeates the political and economic discourse in advanced economies: taxpayers' money versus public money. One former British Prime Minister declared quite cogently and sincerely that there is no such thing as 'public money'. The state has no money of its own. Any of the state's monies are borrowed from our savings or accumulated through the  taxes we pay. Implied in Thatcher's peroration, was the notion that the state is a bit of a leech; grabbing our hard earned money for its own purposes, to justify its existence, as it were. There is a grain of truth in this stance (it's hard to be absolutely wrong).

The binary opposition to this perspective is that taxes are legislated for by a directly elected representative parliament and there is a moral foundation underpinning all that the government does, of which collecting taxes and borrowing money is one of its  major functions. This money is now public money. We, the people, have given the parliament our consent. 

So, roughly speaking, there are the two competing ideological positions around  the role of government. They both have substance and both must be taken on board when deciding and implementing government policy. The parliament must consider that it is not completely its own money it is spending when devising programmes.  Hence, due care must be taken, when allocating public monies. It is the government's job to be a judicious custodian of others, i.e., taxpayers' money, that granted, has been transformed into public money.

Likewise, it is a moral imperative of citizens to pay taxes due to government, a government to which we have given our consent to - a government endowed with a moral raison d'etre. A government which provides  a lot of services and should redistribute wealth in a fair and thoughtful manner. Public money is for the public good.
Hence, a bipolar debate is not helpful. Government finances can be understood both as public money and taxpayers' money. It is not one or the other. And there is a moral compunction on citizens to contribute to public money and for public officials - also citizens - to spend taxpayers' money wisely.