Economists who are skeptical about the spending-heavy US fiscal stimulus package are exulting in the reminder from Mario Rizzo on the NYU Think Markets blog that John Maynard Keynes favoured cutting national insurance (social security) tax rates in a recession. Hence, goes the claim from Tyler Cowen, anyone calling themselves Keynesian is intellectually obliged to support social security tax cuts in the stimulus package.
But what are the odds that you can go to one quote in 1942 and find something so on point for today? The full context is important, and is provided by in Maynard Keynes: An Economist's Biography by Donald Moggridge (p710) --
He [Keynes] also continued discussion with Meade on the finer points of stabilization policy. He made clear his continuing preference for using changes in investment to stabilize demand with one exception, Meade's proposed countercylclical variation in social insurance contributions. His reasons were various: he still believed that rapid attainment of capital saturation was desirable; he thought it would be easier to encourage investment rather than consumption in a slump; and he believed that countercyclical tax changes would have little effect on consumption in the short-run except for the working classes, who would be more efficiently affected by Meade's scheme.
In other words, besides that single cut, Keynes thought that tax cuts were useless in a recession and the government would have to take the lead in ending the slump through direct management of investment. Now that's Keynesianism we can believe in!