Examining Two of Keynes’s Most Popular Statements—Wasteful Public Spending Can Be Acceptable,and,In The Long Run We Are All Dead—Yields Some Surprising Implications

Abstract

Analysis shows that John Maynard Keynes likely interpreted the concept “long run” as reflecting the dimension of calendar time, rather than operational time. More importantly, Keynes was not the advocate of wasteful spending as usually believed. He actually placed strong restrictions on this prescription; it was not an unconditional invitation to raid the public larder. Journalists, politicians, and many economists have overstated his ardor for wasteful spending.