Keynes Lost and Found

A fierce debate raged on both sides of the Atlantic in December 2008 and January 2009 as to whether it was appropriate for governments to respond to the massive, global economic downturn by engaging in deficit-financed stimulus spending. The debate in large part reprised arguments made in the mid-1930s as governments struggled with the Great Depression. John Maynard Keynes argued strongly then for aggressive government spending to put people back to work. His General Theory of Employment, Interest, and Money, published in 1936, directly attacked the economic orthodoxy of his day that insisted that the proper way to bring about recovery was for governments to balance their budgets and wait for a revival of private investment.