Deficits may be necessary for growth from "summary" of The General Theory of Employment, Interest, and Money by John Maynard Keynes
In an economy where demand is insufficient to absorb the full employment of resources, deficits may be necessary to stimulate growth. This is because, in such a situation, investment is not sufficient to maintain full employment and increase economic activity. Deficits can bridge the gap between saving and investment, thereby boosting demand and encouraging businesses to invest in new capital goods. By running deficits, the government can inject additional purchasing power into the economy, which can help stimulate consumption and investment. This increase in demand can lead to higher levels of output and employment, as businesses respond to the increased demand by producing more goods and services. In this way, deficits can play a crucial role in promoting economic growth and reducing unemployment. Moreover, deficits can also have a multiplier eff...
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