smoothing. Second deficits can be eliminated through a fiscal reform, but such a reform may only take place after a" delay …

. In the first period, the politicians propose both whether to experiment with an efficient reform with uncertain benefits … that allowing politicians to raise debt ensures that the reform is always implemented when the reform’s ratio of private … good to public good gains exceeds a threshold, i.e. the reform generates enough private good benefits. This is not the case …