General government debt in advanced countries has grown about 40 percentage GDP points since the eruption of the 2007 US household debt crisis. This growth was determined by the financial sector bailouts and by the impact of the crisis on public expenditures and revenues. However, the prevailing view is still that a) the financial instability is stemming from the public sector; b) to overcome the global debt overhang, public deficit reductions must be achieved permanently to revive national savings and resume the growth process. Against this idea, I will argue that, for a government which is able to exercise full authority over national economic policies, deficit spending is self-financing and public debt is always sustainable. The main determinant of the Public debt/GDP ratio is not the public deficit in itself, but the effect that the public deficit exerts on the growth rate. A higher deficit makes public debt sustainable because it promotes growth. Public deficits not public surpluses are needed to overcome the global debt overhang. The point is that governments do not control macroeconomic policies (and thus the ratio Public debt/GDP) because the fully liberalized regime of international movements in goods and capital, implemented worldwide over the last three decades. I intend to develop this point with particular reference to the Italian experience over the 7 decades after WW2. In the Italian case, in fact, it is particularly evident how deficit spending policies, when framed into a more general context that fostered their full effectiveness, led to a controlled trend in the Public debt/GDP ratio. The problem of the exces­sive growth of Italian public debt originated in the early eighties, as an effect of the libera­lization of capital movements and of a tax system too generous towards non-wage incomes. Subsequently, it exacerbated because of Maastricht's austerity policies and the insane attempt to check public debt by enacting deficit reductions, ignoring their depressive effects on GDP growth. In the current situation, the weight of the Italian public debt can only be alleviated through its partial monetization, a solution that is hindered by the European institutional set-up.