WaPo: For Insight on Stimulus Battle, Look to the '30s
Underlying the partisan division over President Obama's stimulus bill is a dispute over history -- a decades-old debate between liberals and conservatives over the impact the New Deal had in bringing the country out of the Great Depression.
Senate Minority Leader Mitch McConnell (R-Ky.) said flatly last week that "the big-spending programs of the New Deal did not work." Sen. Richard Shelby (R-Ala.) said, "If we look back, even to the New Deal, it's not going to help employment." And two economists argued in the Wall Street Journal that "there was even less work on average during the New Deal than before FDR took office."
But most mainstream economists say the lessons of the Depression, which didn't end until World War II spending kicked in, are different. They say New Deal spending programs instituted by President Franklin D. Roosevelt -- combined with moves to bolster the banking system, loosen monetary policy and end the gold standard -- did help put millions of people back to work. At the same time, they say that federal spending increases under Roosevelt before the war were modest compared with the size of the economy, and not a good test of stimulus spending.
Read entire article at WaPo
Senate Minority Leader Mitch McConnell (R-Ky.) said flatly last week that "the big-spending programs of the New Deal did not work." Sen. Richard Shelby (R-Ala.) said, "If we look back, even to the New Deal, it's not going to help employment." And two economists argued in the Wall Street Journal that "there was even less work on average during the New Deal than before FDR took office."
But most mainstream economists say the lessons of the Depression, which didn't end until World War II spending kicked in, are different. They say New Deal spending programs instituted by President Franklin D. Roosevelt -- combined with moves to bolster the banking system, loosen monetary policy and end the gold standard -- did help put millions of people back to work. At the same time, they say that federal spending increases under Roosevelt before the war were modest compared with the size of the economy, and not a good test of stimulus spending.