Wednesday, July 27, 2011

Obama, FDR, and the Strategy of Massive Spending


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via The Corner by Burton Folsom, Jr. & Anita Folsom on 7/27/11

"FDR comes in, he tries all these things with the New Deal; but FDR, contrary to myth, was pretty fiscally conservative." Thus spoke President Obama at a town-hall meeting at the University of Maryland. The president likes FDR and believes the two of them think in similar ways. That may be true, but the major myths we need to correct are those put forth by President Obama on the success — or lack thereof — of FDR's economic policies. Let's look at three myths about FDR that Obama supported in his town-hall speech.

First, FDR was "pretty fiscally conservative." False. No president before FDR ever grew the national debt more rapidly in peacetime. In fact, FDR increased the national debt by more in his first two terms than 30 presidents combined did before him, more than doubling it. And in April 1939, toward the end of his second term, unemployment was 20.7 percent — greater than it had ever been before the Great Depression. All that massive spending and almost no jobs created with those tax dollars.

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