Commenter Blue Aurora points me to this review by Michael Emmett Brady (screwy spacing is copied in from Amazon):
"J. M. Buchanan's(JMB)book is completely mistitled and out of date.Nowhere in any of Keynes's writings does Keynes ever advocate a policy of deficit finance,which is actually the brain child of Abba Lerner,a member of the American Keynesian-Neoclassical Synthesis school of economics.Lerner used the term functional finance to describe deficit finance.During a visit to America in 1944 as the representative of England's Treasury Department,Keynes totally disagreed with Lerner's approach.Keynes's approach is an advanced version of the cyclically balanced budget first laid out in clear terms to the Pharaoh by Joseph some 3,700 years ago-build up a surplus in the good years that will cover the deficits of the bad years.This is the first statement of what economists call a countercyclical fiscal policy.Keynes's additional provision is that the budget be split into two categories-one of which would be a capital budget.The government could only run deficits in the provision of capital projects in public infrastructure(building dams,reservoirs,water projects-irrigation networks,seaports,airports,public transportation projects,public schools,colleges and universities,public research laboratories,etc.,)that would pay for themselves in the long run.Nor was Keynes an advocate of tax cuts in an economic downturn except for temporarily suspending the social security tax for workers only.Keynes's major policy recommendation was the maintenance of low interest rates combined with a central bank policy of eliminating loan availability for speculative undertakings(greenmail,leveraged buyouts,hostile takeovers,margin account loans,corporate raiders,junk bonds,etc.).The correct title for JMB's book up until 1981 is"Democracy with minor to moderate deficits:The Political Legacy of the American Keynesian-Neoclassical Synthesis School".After 1981,JMB should have retitled his book as"Democracy and Catastrophic Deficits:The Political Legacy of Laffer,Reagan,and the 12 years of the Two Bush Presidencies" .The national debt when President Reagan took office stood at 925 billion dollars.As of July,2005,the national debt will have surpassed 8 trillion dollars.The Libertarian-pseudo conservative policies of tax cuts,borrowing and excessive spending of 8 years of Reagan and 12 years of the two Bush presidencies has increased our national debt by a factor of 9.JMB needs to completely rewrite his book.First,he needs to incorporate the theoretical foundations of the story of Joseph and the Pharaoh from the Old Testament.He will probably need to purchase a bible in order to correctly cite verse and page.Second,he needs to obtain a copy of Keynes's General Theory and read what Keynes actually wrote and not what Henry Hazlitt claims what Keynes meant in his 1959 "Failure of the 'New Economics'".
He makes the point I do about other influences on the deficit after 1980 (if we're blaming any economists for the dirty work of politicians, that is). In this Lerner/Keynes fight I actually side with Lerner - and I think the post-war experience has vindicated him. We can run deficits indefinitely. The trick, of course, is how fast the deficits grow relative to the economy.
"It was a different world then"
7 hours ago