Still living beyond our means

June 27, 2013 

We have allowed presidents for decades to spend more than government takes in. Why? As Butch Cassidy said, "We can't do that. How can they do that?" Political bidding (BND June 12) is part of it, but another culprit is the British economist John Maynard Keynes. His "General Theory," published in 1936, is still ranked among the 100 greatest books.

Keynes said gross domestic product can be managed for the general good. Government spending needs to rise -- or taxes fall -- when individual and business spending falls; the reverse is needed when individual and business spending rises.

Keynes endorsed deficit spending in recessions and surplus spending in expansions. He claimed (or hoped) the pluses and minuses would balance out.

Unfortunately, Keynesian theory has had only one true apostle since World War II. Harry Truman's budgets balanced in total over his presidency.

The other 11 Oval Office occupants have all been bait-and-switch Keynesian con men. Not one has presided over deficits offset in total by surpluses. Many have invoked Keynes to bless what they wanted to do anyway: deficit spend.

In billions of constant 2005 dollars, successive presidents have run deficits in excess of surpluses: $18 billion (Eisenhower), $33 billion (Kennedy), $52 billion (Johnson), $49 billion (Nixon), $210 billion (Ford), $150 billion (Carter), $292 billion (Reagan), $330 billion (George H.W. Bush), $57 billion (Clinton), $248 billion (George W. Bush) and $1,062 billion (Obama).

So the next time a candidate says he's a Keynesian, do future generations a favor. Vote for the other guy.

Eric Weidmann


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