To address that, and particularly for the benefit of the religiously-oriented among the anti-Keynesian conservatives, I have come up with this way of explaining the Keynesian fiscal policy.

************************

There’s a story in the Bible that has the same basic insight that’s underlies Keynsian fiscal policy. It’s the story of Joseph’s interpretation of Pharoah’s dream– an interpretation that not only saves Joseph from prison and makes him Pharoah’s right hand man but, more important for understanding why we should be grateful for the insight of the British economist, Lord Keynes, an insight that saved the Kingdom of Egypt from a great calamity.

As you may recall, Pharoah had these dreams:

Pharaoh had a dream: He was standing by the Nile, 2 when out of the river there came up seven cows, sleek and fat, and they grazed among the reeds. 3 After them, seven other cows, ugly and gaunt, came up out of the Nile and stood beside those on the riverbank. 4 And the cows that were ugly and gaunt ate up the seven sleek, fat cows. Then Pharaoh woke up.

He fell asleep again and had a second dream: Seven heads of grain, healthy and good, were growing on a single stalk. 6 After them, seven other heads of grain sprouted—thin and scorched by the east wind. 7 The thin heads of grain swallowed up the seven healthy, full heads. Then Pharaoh woke up; it had been a dream.

And when, after Pharoah had failed to get an interpretation of these dreams from his own wise men, Joseph was summoned before him, this is the wisdom that Joseph drew from the dreams:

“The dreams of Pharaoh are one and the same. God has revealed to Pharaoh what he is about to do. 26 The seven good cows are seven years, and the seven good heads of grain are seven years; it is one and the same dream. 27 The seven lean, ugly cows that came up afterward are seven years, and so are the seven worthless heads of grain scorched by the east wind: They are seven years of famine.

28 “It is just as I said to Pharaoh: God has shown Pharaoh what he is about to do. 29 Seven years of great abundance are coming throughout the land of Egypt, 30 but seven years of famine will follow them. Then all the abundance in Egypt will be forgotten, and the famine will ravage the land. 31 The abundance in the land will not be remembered, because the famine that follows it will be so severe. 32 The reason the dream was given to Pharaoh in two forms is that the matter has been firmly decided by God, and God will do it soon.

33 “And now let Pharaoh look for a discerning and wise man and put him in charge of the land of Egypt. 34 Let Pharaoh appoint commissioners over the land to take a fifth of the harvest of Egypt during the seven years of abundance. 35 They should collect all the food of these good years that are coming and store up the grain under the authority of Pharaoh, to be kept in the cities for food. 36 This food should be held in reserve for the country, to be used during the seven years of famine that will come upon Egypt, so that the country may not be ruined by the famine.”

That’s the essential insight of Keynesian economics: that pattern of seven fat years followed by seven lean years is just like what the business cycle constantly produces in a market economy. Before Keynesian economics, the cycle of boom and bust was devastating during the bust times because there was such a terrible “famine” of what “feeds” the economy: namely, demand. With a famine of spending by businesses and families during lean times, a vicious cycle of unemployment and business failure would ensue.

So Keynes said: during the fat times, government should take a portion of the economy’s “good harvest” and, with its taxation, fill the “graneries” of the treasury with the means to “feed” the economy when the lean times come. Government should take in more than it spends in fat times, and then spend more than it takes in during the lean years. That way, it can feed the economy and avoid that destructive famine that otherwise destroys businesses and families during the bust part of the business cycle.

We are now in lean times. And just as Pharoah kept Egypt alive by drawing down his graineries during the lean years, it is entirely fitting that the government should run a big deficit to protect the economy from that famine of insufficient demand.

If there is any problem with our national debt –and there IS a problem– it is NOT because we are emptying the graineries now, in hard times. Rather, it is because we did not practice what Joseph told Pharoah to do during the fat times: we did not fill our graineries.

Instead, we doubled our national debt during the years that led to this deep economic recession. The time of irresponsibility is not now, when the economy needs to be fed from the government “graineries,” but rather in the fat years, when we should have been storing up in the national treasury during the economic expansion so we’d have the resources saved, as Pharoah did, to get us through the time when the harvest of our economy was poor.