"Larger deficits are necessary and proper means to mitigate unemployment as the far greater evil in terms of human welfare"

William Vickrey’s assertion draws upon the interplay between fiscal policy, government deficits, and their role in stabilizing employment within an economy. He argues that running larger government deficits, typically seen when government spending exceeds its revenues, is not just an expedient, but a justified and responsible course of action when the primary economic challenge is high unemployment. In this view, the “greater evil” is persistent, widespread unemployment, with its far-reaching consequences for individuals, families, and society at large.

Unemployment, according to Vickrey, devastates human welfare far more severely than the potential dangers posed by increased government debt. The loss of income, social status, self-worth, and access to basic needs are deeply felt by the unemployed. Such consequences ripple through communities, leading to lower aggregate demand, declining business revenues, and a downward economic spiral. Individuals without work often suffer psychological distress and increased health problems, while broader society faces rising costs related to social support systems and lost productivity.

From the perspective of macroeconomics, Vickrey’s argument aligns with Keynesian thought, which contends that in times of demand shortfall, government intervention through increased spending is necessary to fill the gap left by the private sector. Deficits, in this context, become essential tools for injecting purchasing power into the economy, stimulating demand, and thereby encouraging firms to expand production and hire more workers. By doing so, the government acts to stabilize the business cycle and hasten recovery from recession.

Vickrey thus advocates seeing budget deficits not as inherently hazardous, but as pragmatic instruments when the alternative is allowing unemployment to persist. The human and economic costs of prolonged joblessness outweigh the financial risks of temporary deficits, particularly when economies have the fiscal capacity to borrow. In his framework, prioritizing employment is a moral and economic imperative, with deficit spending serving as a legitimate means to secure human welfare against the harms of mass unemployment.