Where Does the Idea That Deficits Don’t Matter Come From?

Many believe that the postulate that public budget deficits do not matter comes from John Maynard Keynes, the English economist who proposed the policy of deficit spending. Yet Keynes was in favor of a balanced budget in the long run. Deficits were meant to revive the economy in a recession, while the boom time should serve to reverse the deficit and obtain a budget surplus. The origin of…