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Keynes and Macroeconomics After 70 Years

Keynes and Macroeconomics After 70 Years

Critical Assessments of The General Theory

Edited by L. Randall Wray and Matthew Forstater

In this substantial new collection, esteemed Post-Keynesian scholars reassess the relevance of Keynes’s The General Theory to a broad array of topic areas, ranging from the environment, investment finance, exchange rates, and socialism, as well as inquiries into general Post-Keynesian theory.

Chapter 12: Eisner’s Radical Approach to Social Security – Tell the Truth!

Stephanie Kelton

Subjects: economics and finance, post-keynesian economics


Stephanie Kelton INTRODUCTION Post Keynesians undoubtedly appreciate Robert Eisner for his contributions to investment, capital accounting and budgeting. In his later years, Eisner turned his attention to the issue of social security, laying bare the arguments of its so-called ‘saviors’, who sought to weaken (if not destroy) the system from within. Against the various calls to reform the system by slashing benefits, raising the retirement age, privatizing its contributions, and so on, he put forward the most honest and enlightening argument I have yet run across. His short book, Social Security: More Not Less (1998a), and his article in the Journal of Post Keynesian Economics, ‘Save social security from its saviors’ (1998b), have influenced my own work on the subject, and his name is always the first one I offer to those looking to understand my seemingly radical position on the issue. Bob Eisner did not believe that social security was facing a crisis – not now, and not in the future. He rejected the idea that it could go ‘bankrupt’ and insisted that there were any number of easy accounting solutions to deal with what he perceived to be a simple accounting problem. He had a keen understanding of balance sheet accounting, and he was willing to explore the potentially mind-numbing institutional details of the system’s inner workings. These characteristics allowed him to expose the weaknesses in the arguments of his opponents, while strengthening his own position, simply by demonstrating the way things actually work. These are...

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