The Irish crash that began in 2008 has been described as one of the most dramatic economic reversals ever experienced by an industrialised country. There is a strong consensus about the economic roots of the crisis: the country experienced a classic asset bubble. Much more difficult to explain however, is how a mature democracy sleep-walked into a crisis that had so much precedent and in retrospect seems to have been so apparent. The policy decisions made in the boom period must shoulder much of the blame, but they were not created in a vacuum. This thesis systematically examines the discourse on the Irish economy from a broad range of commentators in the years prior to the crash, including international and domestic organisations, academics, the newspapers, and politicians. It demonstrates that key mainstream analysts anticipated how the property boom would end on the basis of estimated fundamental house prices and demand levels. This implicitly assumed that these fundamentals would remain strong as the boom abated, and ignored the potential for a market panic. By contrast, the most prescient analysts relied heavily on international precedent, and recognised that property price falls would be closely correlated with the increase observed during the boom. A key dimension of the discourse was therefore how the lessons of financial history were applied or disregarded. The Irish crash that began in 2008 has been described as one of the most dramatic economic reversals ever experienced by an industrialised country. There is a strong consensus about the economic roots of the crisis: the country experienced a classic asset bubble. Much more difficult to explain however, is how a mature democracy sleep-walked into a crisis that had so much precedent and in retrospect seems to have been so apparent. The policy decisions made in the boom period must shoulder much of the blame, but they were not created in a vacuum. This thesis systematically examines the discourse on the Irish economy from a broad range of commentators in the years prior to the crash, including international and domestic organisations, academics, the newspapers, and politicians. It demonstrates that key mainstream analysts anticipated how the property boom would end on the basis of estimated fundamental house prices and demand levels. This implicitly assumed that these fundamentals would remain strong as the boom abated, and ignored the potential for a market panic. By contrast, the most prescient analysts relied heavily on international precedent, and recognised that property price falls would be closely correlated with the increase observed during the boom. A key dimension of the discourse was therefore how the lessons of financial history were applied or disregarded.

Borrowing money is a core instrument of governments to fund goods with high front costs andlong-term benefits. Scholars have, however, primarily associated public debt with shortsighted policies by office-seeking politicians. The three essays in this dissertation investigate the determinants and outcomes of popular preferences for investment-oriented public debt using novel voting, survey, and budgetary data. The first essay asks: Is a community more amenable to borrowing when its time horizon shortens?Existing theories argue that individuals with shorter time horizons, like seniors, have a higher inclination towards borrowing because they overvalue current consumption and discount future costs. I verify this assumption by studying how population aging affects support for debt-funded investments. Using novel data sets on U.S. state and local bond referendums over six decades, I show that, conversely, aging decreases support for debt-funded investments. Contrary to mainstream predictions, an original conjoint survey experiment further demonstrates that seniors do not have a greater preference for policies with longer repayment maturities and shorter benefit periods. Rather, aging lowers support for investments by increasing fiscal conservatism and shifting consumption away from capital-intensive goods. The effect of aging varies depending on which age groups cohabit with seniors. In particular, aging communities experiencing an influx of nonrelative children show greater opposition to new investments, while increased contact with relative children has no detectable effect on their support for investments. These findings suggest that population aging can complicate the construction of political coalitions over investments, particularly in communities with diverse age distributions. The second essay inquires: Do popular preferences affect how governments fund policies? Policy funding is often presented as technical and hardly influenced by voters. I study this assumption by investigating the effect of population aging on U.S. municipal budgets between 1970 and 2017 with the use of data on municipal finances and mayors’ characteristics. In contrast, I find that aging increases appetite for consumption-oriented policies, leading to more short-term budgeting. When a municipality’s population ages, it substitutes current expenditures for capital spending, shortens its debt maturity, and favors liquid revenues over long-term borrowing. Ultimately, this translates into lower indebtedness and higher property tax revenues. In contrast, its expenditure levels and distribution between policies remain stable as seniors’ fiscal conservatism constrains surges in spending, and seniors’ interest in property values limits cuts in municipal amenities. The effects of aging are not uniform, as municipalities ruled by elderly mayors implement debt policies more aligned with seniors’ preferences. These results contradict the dire budgetary predictions associated with aging and show that seniors’ ideological and economic motives can counterbalance their distributional demands. They also illustrate that the preferences of minorities are better represented when they elect politicians who resemble them. The last essay questions: Do voters care about how a policy is funded? Even if citizens can grasp the technicalities of public finances, policy funding may still not matter to them. Indeed, the Ricardian equivalence argues that people are indifferent about whether a policy is funded by debt or taxation because they internalize the future costs of debt repayment in their bequests. Using a novel dataset of 22,000 local referendums and two original conjoint survey experiments, I demonstrate that, conversely, voters prefer financing policies by small tax increases rather than borrowing. My surveys also reveal that respondents discriminate against policies with longer repayment periods. This result contradicts both the Ricardian equivalence’s assumption that people are indifferent to how policies allocate costs over time and the premise that people overlook future borrowing costs. Time preferences are important to explain opinions regarding debt and taxation, as each funding method distributes costs and benefits differently over time. Specifically, people’s resistance to long repayment periods lowers support for debt-funded projects. Variations in preferences between debt and tax remain after accounting for their temporal differences. My analyses indicate that preferences do not vary by policy content or relative to personal financial investments, although conservative individuals display greater support for borrowing than liberals.