Between 1993 and 2001, federal debt held by the public fell from 49.2 percent of GDP to 32.5 percent of GDP. What stopped the paydown of debt wasn’t liberal big spending; it was demands from conservatives that the surplus be used to cut taxes. George Bush said that a surplus means that the government is collecting too much money; Alan Greenspan warned that we were paying off our debt too fast.
Oh, and I was very much against those tax cuts, arguing that we should pay down the debt to prepare for future needs. As a reward, I now get accused of inconsistency, for saying that deficits were bad under Bush but good now.
From Debt and Forgetfulness
What critics of Keynes don’t understand is that it isn’t about deficit spending. Ideally, it is about saving when times are good and spending when times are bad. Counter-cyclical spending to keep the highs from getting too high and the lows from being too low.