The Office for Budget Responsibility, in its major review in this area, found: “Looking back at the pre-crisis era, it is hard to argue that the tax and spending policies implemented in the early and mid-2000s are in themselves an important cause of the crisis and recession. But there was undoubtedly weaknesses in fiscal management during that period, some apparent at the time and some more with the benefit of hindsight.
“The Labour government increased public spending significantly as a share of GDP in the mid-2000s, arguing this would be paid for by an increase in tax receipts that then did not fully materialise.”
It added that the OECD warned at the time that the UK had entered the crisis with one of the largest structural deficits in the industrial world and this limited subsequent room for manoeuvre.
Towards the end of the longest modern times economic boom even the most naive Keynesianism suggests that you should be running budget surpluses. No, not to pay down the national debt particularly, not even to create more room for orrowing whenever the bust does come. But simply to be cooling the economy itself. For even that naive Keynesianism does come with the idea that while stimulatory fiscal policy is sometimes a good idea, so also is sometimes austere fiscal policy (err, in the boom, not the bust).
And no, saying that you’re talking about the “current” deficit, ignoring what is being done to “invest” doesn’t cut it. They’re both stimulatory which is probably what you shouldn’t be doing at the peak of a boom.
Do note that this doesn’t rely on any neoliberalism, Austrian theory or anything else. This is plain, simply, vanilla, Keynesianism. And they didn’t even get that right.