EQUILÍBRIO FISCAL E POLÍTICA ECONÔMICA KEYNESIANA

Abstract

Conservative critics of Keynesianism always centered their critiques on the comfort Keynes supposedly gave to irresponsible governments, justifying the persistent occurrence of fiscal deficits. Keynes was in fact concerned with the inability of entrepreneurial economies to spontaneously generate adequate levels of aggregate demand. His policy strategy, however, was much subtler than that described by critics. The strategy relied on two pillars. The first was that expansionary fiscal policy operated through increasing public spending, not increasing deficits. Increased spending would expand income and, as a result, increase tax revenues. Besides, increasing income means also increasing savings and increasing demand for securities, including those issued by governments to finance residual deficits. The second pillar of his policy strategy was that the existence of activist governments, concerned with maintaining full employment would positively impact businessmen’s expectations, inducing them to increase private investments, reducing thereby the need for actual fiscal spending. Deficits would result only in situations where this effect on expectations, for some reason, did not materialize.