Robert Heilbroner and Keynesian Public Finance

Abstract

This paper focuses on two books that Robert Heilbroner wrote with Peter Bernstein on public finance – A Primer on Government Spending (1963) and The Debt and the Deficit (1989). It also discusses how the economic world changed between the early 1960s and the late 1980s, and how these changes affected their books. Primer introduced Keynesian economics, and the possibility that government policy and deficits could be forces for good in the world. Debt focused exclusively on government deficits and public debt. Changing circumstances made this work a more difficult undertaking. During the late 1950s and early 1960s, government budget deficits were small, growth was sluggish, and Keynesianism was the dominant paradigm in macroeconomics. Primer explained Keynesian public finance, why tax cuts would spur spending and growth, and why we should not worry about government debt under these circumstances. By the 1980s, Keynes was vanquished, deficits were ballooning, and Keynesian public finance was under attack. Contrary to the conventional wisdom at the time, Debt advocated government deficits along the lines proposed by Keynes but not along the lines enacted during the Reagan administration. Nonetheless, there were many similarities in these two works. Both made a case for an active government role in creating a good society; and both argued that when done correctly deficit spending created no economic problems and had many benefits.