My view on Keynesianism is that it's basically been bastardised to the point where it's unworkable. I say that because my understanding is that Keynes originally proposed a system where the government ran a surplus during the "good times" and then ramped up borrowing and spending during the "bad times". This actually makes a great deal of sense because during a recession investors are usually falling over themselves to park money with the government at very low interest rates.
But no modern government seems capable of running a surplus for any length of time. And modern Keynesians have basically done away with the surplus requirement so that you can borrow in the good times and borrow more in the bad...
I'm sure they have academic studies that back up that being possible, the issue is the general public don't believe it and the general public elect the politicians who'll have to implement it.
On the other hand if governments did run a proper surplus during the good years, I think there would be much wider acceptance in the general public for significantly more government spending during recessions. The "Keynesian blast" so to speak.
Given all that, any Keynesian response by modern governments will always fall short of what's required for it to actually work because the voting public don't trust the modern incarnation of it.
Running a surplus isn't even a positive goal for governments. In US history, periods of federal government surplus were always followed quite rapidly by recessions or even depressions.
There are even good, clean, mathematical accounting truths behind this. If you sum up all monetary assets and all debts, the net must be zero just as a matter of accounting. So, if individuals are to build up savings (which most people would probably agree is a good thing), somebody else must go into debt. This somebody else could be private firms doing investment, or it could be government.
If you want government to be in surplus or at least netting zero as well, then firms must necessarily be in ever growing debt, which is probably just as unsustainable.
(Note that, as long as you look at a single isolated country, a third option is that foreign countries become indebted. But since we live in a closed system and the net over all countries is zero, this is not really a workable option either.)
Most likely not. I don't actually think it's possible. A government needs to borrow and it needs the facility all the time because you obviously can't predict the kind of disaster that might require it. And inevitably politicians will get into bidding wars in order to get elected which ends up ramping up national debt.
Symbolically though, if government ran a surplus for x years during a particular ten year period, that would be sufficient to say "look, we've mostly balanced the books, we have been running surpluses during some years".
Again it's about public perception more than anything else. When national debt is climbing towards heights only previously reached during WW2 and government has shown zero ability to run a surplus in over a decade (I think Clinton ran surpluses?) then people will simply not trust politicians with the authority to borrow the necessary amount for Keynesianism to work.
Politicians will get into bidding wars in order to get elected which ends up ramping up national debt.
That's it. The rest is just noise. It's just too easy to spend other people's money, under the guise of 'public interest'. Even if the politician is not corrupt, and not, say, channeling public funds to friends, outside of a few obvious cases (foreign invasion, giant earthquake, meteor strike, e.g.) it is difficult to hold politicians accountable for, say "good intentions gone awry".
The United States did quite well for a half century or so (only dipping into debt to pay for wars). There was the moral precept of 'no taxation without representation' and the early government understood that debt incurred the future taxation of people who would not be able to go back in time and vote against the spending[0]. That's all been abandoned long since.
[0] it is often said that "governments are not like families" and so that debt dynamics are different. Well, that is indeed the case. At least when individuals enter a debt, there is a contract of understanding between a single person and the lendee which means that the responsibility for repayment is on the borrower and the consequences of default are on the lender (except in a few morally questionable cases, such as academic debt). When governments enter debt, the payment is the responsibility of, potentially, someone else (there's the 'spending other people's money' again, except this time, at a societal level).
I think he means that it is very rare to find a government that runs a surplus for even a very short amount of time, let alone the amount of time Keynes's original theory intended.
But no modern government seems capable of running a surplus for any length of time. And modern Keynesians have basically done away with the surplus requirement so that you can borrow in the good times and borrow more in the bad...
I'm sure they have academic studies that back up that being possible, the issue is the general public don't believe it and the general public elect the politicians who'll have to implement it.
On the other hand if governments did run a proper surplus during the good years, I think there would be much wider acceptance in the general public for significantly more government spending during recessions. The "Keynesian blast" so to speak.
Given all that, any Keynesian response by modern governments will always fall short of what's required for it to actually work because the voting public don't trust the modern incarnation of it.